Value Capture and Vertical Allocations of Public Amenities

Nir Mualam, Andreas Hendricks, Vida Maliene and Eyal Salinger
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Nir Mualam: Technion, Israel Institute of Technology, Haifa 32000, Israel
Andreas Hendricks: Department of Civil Engineering and Environmental Sciences, Institute of Geodesy, Universität der Bundeswehr München, 85577 Neubiberg, Germany
Vida Maliene: School of Civil Engineering and Built Environment, Faculty of Engineering and Technology, Liverpool John Moores University, Liverpool L3 3AF, UK
Eyal Salinger: Technion, Israel Institute of Technology, Haifa 32000, Israel

Sustainability, 2021, vol. 13, issue 7, 1-21

Abstract: This paper describes and critically reviews an important but under-theorized value capture mechanism that we have termed “vertical allocations” (or vertical exactions). This mechanism enables cities to capture value vertically by allocating floor space for public utilities in privately owned, mixed-use, vertical development. As a value capture tool, vertical allocations allow the government to tap value uplift to supply the nearby neighborhood, and the city as a whole, with much needed public services. The owner or developer is required to make in-kind contributions in the form of spaces provided for a range of public facilities such as schools, preschools, community centers, and public medical clinics. While focusing on vertical exactions in Israel we explore how a certain share of land/floorspace can be allocated for public amenities in a given project. There are several legal pathways for securing public floorspace including negotiated agreements, land readjustment and expropriation. The findings show that unclear policies and regulations could create frictions between developers and municipalities, and these raise the nexus question as well as debates about construction costs and financial contributions developers have to make. Specifically, the paper finds that while developers often argue that cities should cover the costs of constructing public floorspace, city officials assert that the costs should be borne by the owners and developers.

Keywords: value capture; policy assessment; vertical development; public amenities; public-private cooperation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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