Environmental Remediation and Land Value Increment

Limited fiscal space and elevated public debts are challenging local governments to become increasingly interested in recuperating the costs of their public actions. Often, they are seeking remedies for the consequences caused by central government failures and market collapses. We focus on the impact of local government-led environmental remediation in three dimensions: land value increment, higher municipal revenue collection, and improved livability in a depressed area. The latter includes real estate development in a decontaminated area of an abandoned chemical plant in Skopje, the capital of North Macedonia. We also lay out policy options for land value capture as well as mechanisms for private sector involvement in public actions that bring societal benefits. The project’s central objective is to explore the impact of environmental remediation on land value return, municipal revenue, and the livability of municipalities in the vicinity of an ecological ticking bomb. This study is highly relevant for: (1) promoting land policy and urban development in emerging markets (developing and transition countries); (2) reducing socio-economic disparities; and (3) building sustainable and resilient cities and communities.