Land banking allows for the purchase of land for public purposes, so that local governments can influence patterns of development and ensure that it follows planning goals. By acquiring and aggregating a number of land parcels for future development, public or private entities are able to provide affordable housing for employees or for profit. There are three major steps to land banking: land acquisition, land management, and finally, land development.
Land banking has been utilized in Colombia to achieve the provision of affordable housing. Bogotá’s municipal government established MetroVivienda (MV) in 1998, and MV initially bought undeveloped land, then built infrastructure and sold the urbanized plots to private developers. Developers then took on the risk of building and selling housing, and low-income families were able to purchase housing, often through credit or subsidies. From 1993 to 2005, this strategy provided almost 12,000 homes in Bogotá.
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