Essential to the development of affordable housing is effective land administration and policy. One tool in land administration is land value increment taxes, which is when taxes are used as a kind of value capture for increased land value from public infrastructure improvements or changes in approved land use. Land value increment taxes allow the broader community to benefit from increase private property values. Even though this kind of tax has been implemented to fund infrastructure in many places, it is rarely applied to social housing policy, except in a couple countries, including Argentina.
In Argentina, the Trenque Lauquen project aimed to develop 700 hectares of rural land for urban spaces. The local government passed an ordinance to regulate land management tools and instruments like zoning and special assessments – and these tools were applied to social housing instead of public infrastructure. Moving land from rural to urban increased value at an average rate of 12%, and so the local government was able to obtain a large amount of land for social housing construction.
Source:
UN-Habitat. (2021) The role of land in achieving adequate and affordable housing. UN-Habitat.
Link: https://unhabitat.org/the-role-of-land-in-achieving-adequate-and-affordable-housing