At Lincoln House July 2017

Seizing the moment in planning for infrastructure

While plans for massive investments in infrastructure continue to unfold in Washington, the need is clear for a framework to organize projects that will be sustainable, long-lasting, and have the greatest economic payoff in well-defined large regions. The strategy spelled out in the recently completed report Rebooting New England, based on a graduate planning studio at the University of Pennsylvania’s School of Design, may well serve as a model. The report outlines an economic development strategy for New England's bypassed older industrial cities built around a proposed high-performance rail network linking New York and Boston and the region's mid-sized cities, including New Haven, Hartford, Providence, Springfield, and Worcester.

Bob Yaro, professor of practice at UPenn and president emeritus of the Regional Plan Association, shared how insights gained from the process could be used to help shape President Trump's proposed $1 trillion infrastructure program, in the latest installment our lecture series last month.

The Northeast megaregion fuels a $2.2 trillion economy that is 13 percent of the nation’s GDP, and at 52 million people represents 16 percent of the population. But between the hot-market cities of New York and Boston, many post-industrial cities have been left behind — Bridgeport, New Haven, New London, Waterbury, Hartford, Springfield, and Worcester. The unbalanced economic geography could be corrected by facilitating a true agglomeration across the region, Yaro said. The new rail network, from Long Island through Hartford at an estimated cost of $120 billion, would also address congestion and other problems along the Acela Northeast Corridor between New York and Boston, while reducing congestion on highways.

The recommendations from the Rebooting New England report were based, in part, on the UK's Northern Powerhouse revitalization initiative for the North of England, which is investing upwards of $100 billion in infrastructure, downtown regeneration, applied research, skills training and governance reforms to revitalize a similar set of older industrial cities from Manchester to Newcastle.

Key elements include planning on a regional basis, the creation of special combined authorities, expedited permitting and project delivery, and a willingness to invest beyond public-private partnerships. “One of the big ideas from the UK is that debt is OK,” Yaro said, especially given interest rates at historic lows.

In addition to UPenn, Yaro has taught at Harvard, Columbia, the University of Massachusetts, and the University of Texas. In 2005, in partnership with the Lincoln Institute, he led America 2050, which outlined infrastructure and economic development strategies for America's emerging megaregions.

Book provides first overview of property tax in Africa

Africa’s rapid growth and urbanization will require stable local governments to deliver goods and services to billions of people, and the continent can look to an underutilized source of revenue, the property tax, write the authors of a book published by the Lincoln Institute of Land Policy.

In Property Tax in Africa: Status, Challenges, and Prospects (Paperback $40.00, 625 pages: ISBN: 978-1-55844-363-1), Riël Franzsen and William McCluskey of the African Tax Institute at the University of Pretoria provide the first comprehensive study of the property tax in Africa, laying out challenges, opportunities, and pathways to improvement. They analyze property tax systems in 29 countries and offer four regional overviews, highlighting the key political, administrative, and technical issues that affect how these systems function.

The book comes at a critical time for Africa. The world’s fastest growing continent, Africa has added more than 500 million people since 1990, and by 2050 it will hold a quarter of the world’s population. The continent is rapidly urbanizing, and together with Asia will absorb most of the world’s urban growth in the coming decades.

“Nowhere are the fiscal challenges of urbanization more pronounced than in Africa,” Lincoln Institute President and CEO George W. “Mac” McCarthy writes in the book’s foreward. “Establishing high-functioning systems capable of delivering reliable annual revenue flows to help cities make ends meet will require a lot of work. But there is plenty of room for optimism.”

The property tax contributes relatively little revenue in most African countries, representing only 0.38 percent of gross domestic product, on average, compared to more than 2 percent the mostly developed countries that make up the Organisation for Economic Co-operation and Development (OECD). Property Tax in Africa identifies many common challenges, including poor tax collection and enforcement, weak administration, and inadequate systems for assessing property values.

Despite the relatively low utilization of the property tax in most African countries, some cities generate significant revenues from the tax. The property tax represents 42 percent of all locally generated revenue in Freetown, Sierra Leone, 23 percent in Nairobi, Kenya, and 21 percent in Accra, Ghana, for example.

The book also highlights some successes in cities that have been able to bolster their property tax systems. The city of Kitwe, Zambia undertakes supplementary valuations, which have increased the number of properties on the tax rolls and increased assessed values, leading to greater revenue. In Kampala, Uganda, officials from the national Uganda Revenue Authority and the Ministry of Finance collaborated with the local government to set up a new office for revenue collection, which more than doubled the collection of property tax in four years.

A resource for property tax scholars as well as public officials and practitioners on the ground, the book makes recommendations for improving the performance of the property tax in Africa, including the following:

  • Thoroughly analyze the property tax system and decide how it relates to national economic development goals.
  • Audit the legal underpinnings of the property tax and redraft laws, as needed, to lay the groundwork for more effective systems.
  • In most countries, concentrate reform in the largest cities.
  • Focus on collection and enforcement systems first.
  • Plan gradual transitions that allows the tax administration to catch up and taxpayers to get used to the new system.

In addition to continent-wide and regional overviews, the book includes detailed analyses of the 29 countries: Benin, Botswana, Cabo Verde, Cameroon, Central African Republic, Cote d’Ivoire, Democratic Republic of the Congo, Egypt, Equatorial Guinea, Gabon, The Gambia, Ghana, Kenya, Liberia, Madagascar, Mauritius, Morocco, Mozambique, Namibia, Niger, Rwanda, Senegal, Sierra Leone, South Africa, Sudan, Tanzania, Uganda, Zambia, and Zimbabwe.

Odds & Ends

We are hiring for several positions across the Lincoln Institute … We were well represented earlier this week at the Brookings Municipal Finance Conference and Lourdes Germán will be a part of the National Institute of Public Finance convening next week in California … Still a long way from New York or San Francisco, Philadelphia grapples with affordable housing … Martim Smolka helped shape the discussion of property rights, housing, value capture, and implementation of the New Urban Agenda last week in Madrid, Spain … Rethinking the property tax in London including the land value tax … Our partners at New York University presented our Atlas of Urban Expansion to a packed room of 21st century mapmakers …  Planning Magazine reviews Nature and Cities … Resilience, public space, and value capture were hot topics at the New York Times Cities for Tomorrow conference earlier this month, where the Lincoln Institute was a media partner … A well-researched overview of the global land challenge from the BBC … Proposals are being collected for the International Land Conservation Network’s planned Global Congress to be held in Santiago, Chile next year … Cities are getting better at developing useful comprehensive plans, writes Kathleen McCormick in Land Lines  … The Center for Community Investment at the Lincoln Institute is now accepting applications for the Fulcrum Fellowship, a 15-month leadership development program for mid-career professionals to help disinvested communities achieve their environmental, social and economic priorities … This month’s highlighted Working Paper: Evaluating the Effect of Differences in Revenue Systems on the Fiscal Health of Large U.S. Cities, by Howard Chernick.

 

--ANTHONY FLINT & WILL JASON

Photo credit: Union Station, Worcester, MA By Jason Ouellet & Chelsea Creekmore / Flickr CC BY 2.0

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