Financing Sustainable Development in Latin American Cities

It doesn’t take much to understand the magnitude of the challenge that our Latin American cities are facing in terms of infrastructure financing and sustainable urban development. Despite significant investments in local development projects, the lack of funds for infrastructure financing is currently between 5 and 6.5 percent of the region’s GDP, according to the Economic Commission for Latin America and the Caribbean (CEPAL), that is, between $355 billion and $462 billion annually. Approximately 40 percent of this gap falls within the scope of subnational governments. In an increasingly challenging environment for local tax administration, how can subnational governments contribute to closing this gap? One solution lies in urban land value and use policies as levers for development financing, since the valuation of land generated by public action can be impressive—sometimes even greater than the cost of the infrastructure projects that lead to such increases in land value.

Consider, for example, the effect on real estate valuation that is expected to be produced by the construction of the Bogotá Metro: it’s estimated that homes located at a walkable distance from the planned stations will have an increase in value of up to 11 percent due to the accessibility benefits the project is expected to generate. The total valuation of private property generated by this investment could be used as leverage to finance, at least partially, the cost of the project.

To meet sustainable urban development objectives, it becomes increasingly important to exchange knowledge and experiences regarding the management of this type of public enterprise, planning, and related land use policies, as well as the various mechanisms for recovering capital gains that cities can consider as additional sources for their financing.

In this context, the Lincoln Institute course Urban Financing and Land Policies: A Review from the Colombian Experience was designed to analyze “the main concepts present in land policies through the review of land management and the application of financing instruments in Colombia,” according to María Mercedes Maldonado, one of the course coordinators. The selection of Colombia as the host country has to do with its long-time application of some of these instruments, such as betterment levies—a fiscal policy based on national legislation that celebrated its 100th anniversary of implementation in 2021—and the existence of legal frameworks that provide a basis for the implementation of these tools.

The Colombian experience allows us to evaluate progress, results, learning, and alternatives to contribute to the discussion on the use of these instruments in the context of Latin America, a region in which the Lincoln Institute has worked for over 30 years. The institute has built an extensive network of collaborators, both institutional and individual, who share a common view on the potential of land management as one of the solutions to the various challenges faced by cities in the region.

The Universidad de Los Andes is part of this valuable network, and for the second consecutive year the course was organized at the facilities of this institution in partnership with the Interdisciplinary Center for Development Studies (CIDER, in Spanish) of the Faculty of Social Sciences. The course was led by Erik Vergel, associate professor at the School of Architecture and the CIDER, and specialist in transportation issues and land policies; and Maldonado, a lawyer and specialist in housing, urban financing, and land policies. This alliance, Vergel said, “is one of the most important for the Universidad de Los Andes in terms of internationalization processes, dissemination of new knowledge, and training urban matter specialists in the Latin American and Caribbean region.”

Besides Vergel and Maldonado, the group of professors also included María Cristina Rojas, architect and specialist in economics and urban development; Magda Montaña, lawyer and specialist in taxation; Oscar Borrero, economist and specialist in appraisal and market studies; and Néstor Garza, an economist who specializes in urban and regional economics.

A classroom where course participants pay attention to the speaker. — Participants traveled to Colombia to take part in the course, which included a mix of master classes, group exercises, case study presentations, pedagogical games, and field trips. Credit: Alejandro Barragán, Faculty of Architecture and Design, Los Andes University.

In this course, 45 participants, selected from a group of 301 applicants, had the opportunity to meet in person for five days to exchange ideas and discuss the implementation of different urban financing instruments in their respective countries. The high number of applicants highlighted the interest in training on these topics.

The participants included professionals from different areas, including researchers, public officials, graduate students, lawyers, economists, architects, political scientists, urban planners, engineers, and geographers. They represented 14 countries in the region—Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Mexico, Panama, Paraguay, Peru, Uruguay, and Venezuela—as well as Puerto Rico. This diversity of nationalities and backgrounds brought richness to the dialogue and allowed participants to compare their experiences related to urban financing and implementing land management instruments.

The structure and content of the course was designed to stimulate active learning, using peer exchange and practical application of the content studied. The program was composed of a mix of master classes, group exercises, case study presentations, pedagogical games, and field trips.

The thematic content moved from the general to the specific, starting with a review of the general framework of financing and land management instruments in Colombia within a Latin American context. Subsequently, basic concepts of land markets, urban spatial structure and land pricing were addressed, followed by a more detailed study of instruments, such as betterment levies, urban planning obligations, and land readjustment. The program also included sessions to study the application of these instruments in urban mobility and public housing projects.

One of the new features introduced this year was the Urban Tarot activity, a pedagogical game whose development was supported by the Lincoln Institute in 2016, and which was led on this occasion by one of its authors, María Cristina Rojas. This game aims to familiarize participants with different planning, land management, and urban financing instruments through the development of strategies that require the incorporation of these tools to solve problems inspired by Latin American cities.

José Lazarte, one of the participants, commented: “[The course] encouraged an accessible and contextualized reflection . . . integrating technical and practical knowledge in a format that stimulated interdisciplinary dialogue and strategic thinking on urban transformation.” In this regard, Rojas said: “This activity led to a lot of discussion regarding the instruments: which ones are useful, and which ones are not, for a given problem.” The game was very well received by the students and allowed the group of teachers to evaluate the level of understanding of different concepts and tools through the strategies developed by the participants and the reasoning behind them.

One of the activities of the course was the Urban Tarot game, in which cards representing different planning, land management, and urban financing instruments are used to propose solutions to problems inspired by Latin American cities. Credit: Alejandro Barragán, Faculty of Architecture and Design, Los Andes University.

On the last day, the course concluded with field trips to urban mobility and land management and public housing projects in Bogotá, specifically the Ciudad Bolivar aerial cable and the “El Ensueño” partial plan. These visits allowed for first-hand observation of the application and potential of instruments that had been previously discussed in the classroom.

This connection between theory and practice helps to strengthen learning. By touring projects on the ground, speaking with local organizers, and seeing the results of policies and instruments at work, participants can more clearly understand the challenges, impacts, and potential of the tools analyzed. Finally, the experience in the field created a valuable space to discuss lessons learned and reflect on the feasibility of adapting certain strategies to each participant’s locality.

Among the most positive aspects of the course, the participants highlighted the experience of the teaching team, the variety of applications and instruments presented, the practical exercises of urban planning and capital gains estimation, and the richness offered by peer-to-peer exchange from different countries. “The environment of this course invites us to make joint reflections in the face of the scenarios that occur in different countries,” said Rafael Gómez, one of the participants.

While all attendees said they would recommend the course to others and expected it to have an impact on their work, students asked for more time to delve into the technical, political, and institutional capacities needed for effective deployment of each of the urban instruments presented in the course. In light of these suggestions, the Lincoln Institute will review its specialty courses on these tools to further foster dialogue at the regional level.

Vergel, one of the leaders, remarked that an important insight from the course “lies in the importance of generating spaces of international outreach among professionals in urban issues, allowing for comparative exercises that facilitate the exchange of experiences and knowledge on the coordination between the transport and mobility sector and the housing sector through urban development financing instruments.”

Diego Lomelli is an instructional designer and analyst at the Lincoln Institute of Land Policy.

Luis Felipe Quintanilla is a policy analyst at the Lincoln Institute of Land Policy.

Lead image: Course participants visit public housing built as part of a requirement under Bogotá’s partial development plan El Ensueño. Credit: Luis Felipe Quintanilla.

This article originally appeared in Spanish in June 2025 as “Formación con propósito.”

Land Matters Podcast / Temporada 6 / Episodio 5

Coming to Terms with Density: An Urban Planning Concept in the Spotlight

September 15, 2025

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A conversation all about density, on the occasion of the return of an online resource, Visualizing Density, at the Lincoln Institute of Land Policy website.

By Anthony Flint, September 15, 2025

It’s an urban planning concept that sounds extra wonky, but it is critical in any discussion of affordable housing, land use, and real estate development: density.

In this episode of the Land Matters podcast, two practitioners in architecture and urban design shed some light on what density is all about, on the ground, in cities and towns trying to add more housing supply.

The occasion is the revival of a Lincoln Institute resource called Visualizing Density, which was pushed live this month at lincolninst.edu after extensive renovations and updates. It’s a visual guide to density based on a library of aerial images of buildings, blocks, and neighborhoods taken by photographer Alex Maclean, originally published (and still available) as a book by Julie Campoli.

It’s a very timely clearinghouse, as communities across the country work to address affordable housing, primarily by reforming zoning and land use regulations to allow more multifamily housing development—generally less pricey than the detached single-family homes that have dominated the landscape.

Residential density is understood to be the number of homes within a defined area of land, in the US most often expressed as dwelling units per acre. A typical suburban single-family subdivision might be just two units per acre; a more urban neighborhood, like Boston’s Back Bay, has a density of about 60 units per acre.

Demographic trends suggest that future homeowners and renters will prefer greater density in the form of multifamily housing and mixed-use development, said David Dixon, a vice president at Stantec, a global professional services firm providing sustainable engineering, architecture, and environmental consulting services. Over the next 20 years, the vast majority of households will continue to be professionals without kids, he said, and will not be interested in big detached single-family homes.

Instead they seek “places to walk to, places to find amenity, places to run into friends, places to enjoy community,” he said. “The number one correlation that you find for folks under the age of 35, which is when most of us move for a job, is not wanting to be auto-dependent. They are flocking to the same mixed-use, walkable, higher-density, amenitized, community-rich places that the housing market wants to build … Demand and imperative have come together. It’s a perfect storm to support density going forward.”

Tensions often arise, however, when new, higher density is proposed for existing neighborhoods, on vacant lots or other redevelopment sites. Tim Love, principal and founder of the architecture firm Utile, and a professor at Harvard University’s Graduate School of Design, said he’s seen the wariness from established residents as he helps cities and towns comply with the MBTA Communities Act, a Massachusetts state law that requires districts near transit stations with an allowable density of 15 units per acre.

Some towns have rebelled against the law, which is one of several state zoning reform initiatives across the US designed to increase housing supply, ultimately to help bring prices down.

Many neighbors are skeptical because they associate multifamily density with large apartment buildings of 100 or 200 units, Love said. But most don’t realize there is an array of so-called “gentle density” development opportunities for buildings of 12 to 20 units, that have the potential to blend in more seamlessly with many streetscapes.

“If we look at the logic of the real estate market, discovering over the last 15, 20 years that the corridor-accessed apartment building at 120 and 200 units-plus optimizes the building code to maximize returns, there is a smaller ‘missing middle’ type that I’ve become maybe a little bit obsessed about, which is the 12-unit single-stair building,” said Love, who conducted a geospatial analysis that revealed 5,000 sites in the Boston area that were perfect for a 12-unit building.

“Five thousand times twelve is a lot of housing,” Love said. “If we came up with 5,000 sites within walking distance of a transit stop, that’s a pretty good story to get out and a good place to start.”

Another dilemma of density is that while big increases in multifamily housing supply theoretically should have a downward impact on prices, many individual dense development projects in hot housing markets are often quite expensive. Dixon, who is currently writing a book about density and Main Streets, said the way to combat gentrification associated with density is to require a portion of units to be affordable, and to capture increases in the value of urban land to create more affordability.

“If we have policies in place so that value doesn’t all go to the [owners of the] underlying land and we can tap those premiums, that is a way to finance affordable housing,” he said. “In other words, when we use density to create places that are more valuable because they can be walkable, mixed-use, lively, community-rich, amenitized, all these good things, we … owe it to ourselves to tap some of that value to create affordability so that everybody can live there.”

Visualizing Density can be found at the Lincoln Institute website at https://www.lincolninst.edu/data/visualizing-density/.

Listen to the show here or subscribe to Land Matters on  Apple Podcasts, Spotify,  Stitcher, YouTube, or wherever you listen to podcasts.

Further reading

Visualizing Density | Lincoln Institute

What Does 15 Units Per Acre Look Like? A StoryMap Exploring Street-Level Density | Land Lines

Why We Need Walkable Density for Cities to Thrive | Public Square

The Density Conundrum: Bringing the 15-Minute City to Texas | Urban Land

The Density Dilemma: Appeal and Obstacles for Compact and Transit Oriented Development | Anthony Flint

Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy, host of the Land Matters podcast, and a contributing editor of Land Lines.