News: April 2012 Archives

 PLRG's second free talk of 2012 is next Wednesday at UCL's Bartlett School of Planning (Room 401, Wates House, 22 Gordon Street, LONDON WC1H 0QB) on the subject ...

Towards TIFs: Prospects and Pitfalls.

The speaker is Nick Maltby, partner at Bircham Dyson Bell (BDB) - a leading law firm specialising in property development.

Tax Increment Financing (TIF) is a device for funding infrastructure development from the future property-tax revenue that it is expected to have created. It is commonly used in the US. The Labour Government signed up to it and now the Lib Dem / Conservative Coalition have adopted it here. It is already being used in Scotland but no TIF-funded projects have yet been instigated south of the border.

This talk will explain how TIFs work in America and what the UK and Scottish Governments are doing that is different. Maltby will outline the kinds of project where TIF funding is appropriate and how the parties to such projects (public and private sector) need to act to take them forward.

In last month's Budget, the Chancellor announced that £150 million would be available in 2013-14 for projects in the 'core cities'. This indicates that, although Business Rate revenue is supposed to be largely devolved to local authority control from 2013, Treasury plans to retain control over how any increased revenue from TIF projects is allocated. Otherwise, why not say "Let TIFs happen"!?

How will TIFs sit alongside other reforms in the October 2010 Local Growth White Paper? This said TIF would require legislation, to give new borrowing powers. Maltby has said no new legislation is needed. He has also expressed disappointment at the slow pace of the Coalition's moves towards TIFs.

BDB's July 2011 briefing on TIFs is an excellent preparation for Maltby's latest, exclusive take on the prospects for TIFs in England - which participants in next week's talk at Bartlett School of Planning can hear. To register your place, simply email tony@landvaluescape.org. Space is limited and priority will be given to PLRG paid-up members. Join at the event (subscription is £10 per year).

These talks are a partnership between PLRG and the OMEGA Centre at UCL.

 

A conference of non-governmental organisations (NGOs) affiliated to the UN will this July in New York consider "innovative instruments that capture gains in land value and recover public investments".

The International Union for Land Value Taxation (known as "The IU"), based in London, has "special consultative status" within the UN Department of Economic & Social Affairs (ECOSOC) and has responded to the UN's call for oral and written statements for this July's ECOSOC High Level Statement (HLS). The IU statement reminds the UN that the founding document of UN-HABITAT - the 1976 Vancouver Action Plan - featured clear and strong support for this form of land value capture. It said:-

"Social justice, urban renewal and development, the provision of decent dwellings and healthy conditions for the people can only be achieved if land is used in the interests of society as a whole.... Taxation should not be seen only as a source of revenue for the community but also a powerful tool to encourage development of desirable locations, to exercise a controlling effect on the land market and to redistribute to the public at large the benefits of the unearned increase in land values... The unearned increment resulting from the rise in land values resulting from change in use of land, from public investment or decision or due to the general growth of the community must be subject to appropriate recapture by public bodies."

Author of The IU's statement, Alanna Hartzok of the Earthrights Institute, which runs UN-HABITAT's online Land Rights course, which includes a module on land value capture, says:

"Land Value Capture is a creative public finance policy that utilizes incentive taxation mechanisms that promote productive capacity, employment and decent work while enabling inclusive, sustainable and equitable economic growth. ... The more governments rely on land value capture for revenue, the lighter need be the tax burden on labor and production."

Scottish economist and IU member Professor Roger Sandilands has pointed out that the author of the 1976 Vancouver Action Plan, Lauchlin Currie, had previously been US President Roosevelt's Personal Economic Adviser to China's President Chiang Kai-Sheck during WWII. Chiang was a follower of Sun Yat-Sen, who was greatly influenced by Henry George - the author of the seminal land-tax 'bible' Progress and Poverty. Nationalist Taiwan adopted a form of Land Value Tax when Chiang fled Communist China in 1948.

PLRG Secretary Dr Tony Vickers has contributed to UN-HABITAT's Global Report on Human Settlements, which next year focuses on Urban Transportation. Working with UCL's Professor Harry Dimitriou, Vickers has again drawn attention to the importance of land value capture policy instruments in achieving sustainable financing of transport infrastructure. A talk in UCL's OMEGA Centre seminars will be delivered by him later this year on the subject.

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This page is an archive of entries in the News category from April 2012.

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