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To enhance the Lincoln Institute’s commitment to building research capacity on international land policy issues, the Program on Latin America and the Caribbean initiated an expanded effort in 2006 to support research in that region. Since then the Lincoln Institute has issued annual public requests for research proposals that set out the criteria used to evaluate the proposals and a set of priority thematic topics, normally related to land markets, local public finance, and urban development. This year’s priorities include implementation and impacts of land use regulations; land-based instruments to finance urban development; land markets; and urban form.
Most of those who submit research proposals are affiliated with academic institutions throughout Latin America. Other applicants are typically practitioners from government entities, nongovernmental organizations, and private consultancies, as well as scholars working on Latin American themes at universities outside the region. About two-thirds of the proposals submitted and funded are from researchers having no prior affiliation with our Latin America Program, which is consistent with one objective of the research program—to widen the network of those studying land policy issues in the region.
The average size of research project funding has increased over time from around $10,000 in 2006 to about $26,000 at present. Some projects that involve extensive field work to support empirically based research have received larger amounts. Over time the program has also become more competitive, with the number of applications growing from 90 in the first year to 150 currently.
The priority topics and selection criteria are designed to encourage empirical studies, and the 18-month funding cycle allows time for data collection, analysis, and preparation of a final report. Lincoln Institute staff provide technical assistance to many researchers as they finalize their research designs and carry out their work. The participants are also invited to a methods workshop at the beginning of each research project cycle to review survey instrument and sample design, multivariate statistical analysis, experimental methods, and the use of geographic information systems.
At the end of each research project cycle all participants discuss each others’ draft papers at a research seminar. Both the methods workshop and research seminar are highly valued by the researchers, and the events have been offered in Colombia, Argentina, and Costa Rica to facilitate access from different parts of the region. Other training courses offered by the Latin America Program, such as those on urban economics and land market analysis, are also often relevant for those carrying out these research projects.
Selected final research reports are posted as working papers on the Lincoln Institute Web site. Currently 33 final papers are available and another 15 are in process. Many of these papers are downloadable in both English and either Spanish or Portuguese. In addition, seven of the completed research papers have been summarized as Land Lines articles, making their results accessible to a wide audience. This April issue presents one such report on home values in Mexico, and announces the completion of a CD-ROM that compiles more than 80 Land Lines articles that have been translated into Spanish under the title Perspectivas Urbanas.
This research program complements another long-standing Latin America Program initiative that provides support for students working on dissertation and masters theses. The graduate student program is also competitive and based on open requests for proposals. In the past two years, the Lincoln Institute has taken steps to increase the coordination between these two research support initiatives, particularly by coordinating the priority topics and harmonizing the selection criteria. By supporting both emerging graduates and more experienced researchers, these initiatives are developing an extensive network of capable analysts who can advance knowledge about land policy and its consequences in Latin America.
The request for research proposals in 2010 will be posted on the Lincoln Institute’s Web site and distributed electronically by email to those in the region who have registered on our Web site. See page 28 of this Land Lines issue for additional information.
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Jay Espy joined the Elmina B. Sewall Foundation as its first executive director in January 2008. Based in Brunswick, Maine, the foundation focuses on the environment, animal welfare, and human well-being, primarily in Maine.
For the prior two decades, Espy served as president of Maine Coast Heritage Trust, a statewide land conservation organization. During his tenure, the Trust accelerated its land protection efforts along Maine’s entire coast by conserving more than 125,000 acres and establishing the Maine Land Trust Network, which helps build capacity of local land trusts throughout Maine. He also led the Trust’s successful Campaign for the Coast, raising more than $100 million for conservation and doubling the amount of protected land on Maine’s coast and islands.
Espy received his A.B. from Bowdoin College and master’s degrees in business and environmental studies from Yale’s School of Management and its School of Forestry and Environmental Studies. He serves on the board of the Maine Philanthropy Center and the Canadian Land Trust Alliance. He is a former chair of the Land Trust Alliance, a national organization serving land trusts throughout the United States. In October 2010 he was named the Kingsbury Browne Fellow for 2010–2011 through a joint program of the Land Trust Alliance and the Lincoln Institute.
Land Lines: How did you first become involved in the field of land conservation?
Jay Espy: Early in my senior year at Bowdoin College a wonderful placement counselor pointed out that some real-world experience might be useful in helping me secure gainful employment. I landed an internship documenting seabirds in Maine’s Casco Bay as part of an oil spill contingency planning project. This experience kindled an intense passion for the Maine coast and set the stage for my professional career. Following a stint working for an environmental consulting firm, graduate study in business, forestry, and environmental science at Yale, and several more internships, I was thrilled to accept an entry-level job at Maine Coast Heritage Trust (MCHT) in Topsham. At the time MCHT was a small statewide land trust and a great “school of hard knocks” for an aspiring 20-something conservationist with virtually no credentials.
Land Lines: What are some of the most significant land conservation projects in which you have been involved?
Jay Espy: In the late 1980s a 12,000-acre parcel of coastal land in far Down East Maine near the Canadian border was put up for sale by a major corporation divesting all of its timberland holdings in the northeastern United States and Maritime Canada. This was the largest remaining undeveloped block of coastal land in Maine, and one of the largest anywhere on the eastern seaboard. MCHT had never before faced such an exciting or daunting challenge.
In partnership with the State of Maine, The Conservation Fund, and the Richard King Mellon Foundation, MCHT led an effort to acquire the property and to work with local and state officials on a plan to conserve the land while incorporating appropriate working forest management, recreational trail development, and affordable housing in the Town of Cutler. Although we didn’t know it at the time, we were doing “community conservation” by engaging a wide range of constituents with varying interests. This project also put MCHT in the business of landscape-scale conservation. Dozens of projects have since been completed in that region, known as Maine’s Bold Coast. More than 20 miles of breathtaking shoreline are now accessible to the public and provide economic opportunities for the community.
I feel privileged to have helped protect many other lands, both large and small. Marshall Island, a 1,000-acre gem 15 miles offshore from the Blue Hill peninsula, was once slated for major development, but now has an extensive coastal trail system developed by MCHT. Aldermere Farm in Camden and Rockport is an iconic saltwater farm. Albert Chatfield began raising Belted Galloway cattle here in the 1950s, and the farm has been home to an award-winning breeding herd ever since. Following donation of the property in 1999, MCHT has greatly expanded farm programs for local youth and the community in general and protected additional nearby lands that are being used to support the growing local food movement.
Land Lines: When did you become aware of the Lincoln Institute’s work in land conservation, and how have you been involved in our programs?
Jay Espy: The timing of my entry into the conservation field was most fortuitous. Within months of joining MCHT, I was invited to a gathering of conservation professionals at the Lincoln Institute, co-hosted by the Land Trust Alliance (then known as the Land Trust Exchange). I had previously met Kingsbury Browne very briefly at a conference in Washington, DC, but at that gathering I had the chance to spend a full day with him and some of the other revered leaders of the modern land conservation movement.
Over the course of many years, the Lincoln Institute became a “watering hole” for conservationists, many of them originally assembled by Kingsbury, and they became valued mentors to me as I learned the trade. The Institute has continued to be a place where creative minds gather to innovate and where cutting-edge research and communication for the broader conservation community are encouraged. I am honored to be part of that legacy as a Kingsbury Browne Fellow.
Land Lines: What do you see as future trends in land conservation?
Jay Espy: The conservation field is growing, changing, and maturing in what I believe is a very healthy way. Not long ago many of us in the field thought land conservation was all about the land. I well remember early land trust brochures full of pictures of beautiful landscapes, but entirely devoid of people. Fortunately, that’s no longer true.
Today, most of us in the movement understand that land conservation is about land and people. It’s about how our communities benefit from healthy ecosystems; how outdoor recreational opportunities close to home combat youth inactivity and obesity; how protected farmland contributes to food security and the availability of nutritious local food; how outdoor spaces incorporating local arts and entertainment contribute to vibrant downtowns; how clean water, forestland, and a host of other sustainably managed natural resources support economic development and jobs; and how well-managed land allows each of us individually and collectively to live richer, fuller lives.
All across the country, the silos that have separated the work of conservation, public health, arts, education, hunger, housing, food production, and economic development are coming down. I’m encouraged by this trend. Our work today will only stand the test of time if it has direct and tangible benefit to people over many decades. Collaborative engagement of those with wide and varied interests seems an essential ingredient in any successful recipe for enduring conservation.
Land Lines: How can the challenges of funding conservation become opportunities?
Jay Espy: We do face many challenges on the funding front. Public funding from traditional federal and state government sources has been declining, private foundations have seen the corpus of their endowments erode, and individual donors have been understandably more conservative with their philanthropic investments as the markets have seesawed. As a result, fewer of the mega-scale land deals requiring tens of millions of dollars that we saw in the late 1990s and early 2000s are being launched today.
That said, there is still a great deal of very important conservation work being funded around the country. Public support for local conservation remains high, with most local bond initiatives continuing to pass by wide margins. Foundation and individual giving for conservation has not tanked as many feared. Funders remain supportive, but have become more discerning. Also, conservation projects that address multiple human interests and engage multiple partners appear to be attracting new, nontraditional sources of support. I recently spoke with a health funder who views securing more land for public recreation as a critical preventative healthcare measure. Funding for farmland conservation has also grown substantially in recent years, fueled in part by the explosive popularity of the local food movement.
Land Lines: Can you share some examples of innovative land conservation successes?
Jay Espy: In a remote area of eastern Maine, the Downeast Lakes Land Trust has been working for more than a decade to protect large swaths of forestland with extensive shore frontage near the community of Grand Lake Stream. These lands and waters have supported the timber and recreation-based economy for more than a century. With the decline in the paper and pulp industry, several large commercial timber holdings have been sold.
Rather than simply wait for the inevitable development of seasonal vacation homes and resulting loss in local culture, the community has worked in remarkable ways to acquire tens of thousands of acres and miles of shore land for use as a revenue-generating forest, wildlife preserve, and remote recreational areas. Local business owners, fishing and hunting guides, representatives from state and federal agencies, members of the Passamaquoddy Indian Tribe, and elected officials from the local to the national levels have all joined forces with the land trust to acquire these properties and manage them for sustainable timber revenue, as well as for other traditional uses, including hunting, fishing, camping, and paddling.
In the central Maine town of Skowhegan, an enterprising young woman has acquired an old county jail, which she is converting into a grain mill. Once operational, the mill will process approximately 600 tons of grain annually, an amount requiring roughly 600 acres of farmland cultivated in grain crops. This area of Maine was once a thriving wheat-growing region, and is purported to have supplied the Union troops with a substantial portion of their bread during the Civil War. Located in the heart of town, the parking lot of the old jail already serves as the site of a successful local farmers market. A commercial kitchen and several food and crafts business are co-locating in the jail, helping to create a “food hub.”
Skowhegan is the county seat of one of the most impoverished counties in Maine. Could the food hub start to change the fortunes of this region? Could a growing demand for grain stem the tide of farmland loss and result in more farmland acres being conserved and cultivated? Signs suggest the answer is to both questions is “yes.” I think what’s happening in Skowhegan is a wonderful example of the new face of conservation. It’s not yet readily recognizable, but I suspect we’ll get to know this community-based approach better in the years ahead.
Land Lines: What are your expectations about the role of conservation in the current volatile economy?
Jay Espy: I’m quite optimistic because adversity has a way of bringing people together. With less, we’re learning how to work collectively to do more. As more people participate in conservation, develop relationships with and around land, and experience the positive impact those relationships bring to their lives, I’m convinced we will see even more widespread, meaningful, and durable conservation achievements. Land, people, and community are all deeply intertwined. Ironically, these trying times may be accelerating the inevitable transformation of conservation into an endeavor that benefits even more people and more aspects of community life.
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Los suelos de fideicomisos estatales en el oeste intermontañoso de Estados Unidos podrían cumplir un papel importante en el creciente mercado de energía renovable. El Congreso concedió estos territorios, que cubren 14 millones de hectáreas, a los estados tras su incorporación a la Unión, con el fin de respaldar el sistema educativo y otras instituciones públicas. Los administradores de estos suelos de fideicomisos estatales tratan de encontrar maneras innovadoras y sostenibles de arrendar y vender parcelas para generar ingresos, y la energía renovable podría proporcionar una doble ventaja: suministrar energía limpia y sostenible, y al mismo tiempo generar un flujo de ingresos significativo para el beneficio público.
Los siete estados del oeste intermontañoso (Arizona, Idaho, Colorado, Montana, Nuevo México, Utah y Wyoming — ver figura 1) están usando los suelos de fideicomisos estatales para desarrollar energía renovable, con proyectos de energía eólica, solar, geotérmica y biomasa. Sin embargo, la industria no ha alcanzado todavía su pleno potencial. En 2011, la capacidad instalada de producción de energía renovable en fideicomisos estatales era de solo 360 megavatios, lo cual no es siquiera suficiente para alimentar el 2 por ciento de los hogares de la región. Los US$2 millones de ingresos generados por estas fuentes en suelos de fideicomisos estatales son menos del 1 por ciento de los más de US$1000 millones generados anualmente por otros medios (Berry 2013; WSLCA). La energía eólica es la que está experimentando la mayor actividad; todos los estados del oeste intermontañoso han arrendado suelos de fideicomisos estatales para proyectos eólicos, y todos cuentan con parques eólicos operativos. Si bien Arizona, Nuevo México y Utah han arrendado suelos de fideicomisos estatales para operaciones solares, hay solo una planta de generación en producción en el oeste intermontañoso, en Arizona. Sólo Utah tiene una planta geotérmica en suelos de fideicomisos estatales, y no hay ningún estado en la región que cuente con plantas activas de biomasa en suelos de fideicomisos estatales.
Este artículo se enfocará en tres tipos de energía renovable en tres estados distintos: un parque eólico en Montana, proyectos geotérmicos en Utah y generación de energía solar en Arizona, y en las condiciones, legislación y otros factores que han permitido su explotación exitosa. Estos tres ejemplos demuestran que dichos territorios tienen un potencial desaprovechado en su mayor parte para este mercado naciente de energía sostenible, proporcionan oportunidades de aprendizaje en todos los estados y ayudan a satisfacer la creciente demanda de energía renovable.
Parque eólico Judith Gap, Montana
Judith Gap es el único parque eólico operativo en suelos de fideicomisos en el estado de Montana, parcialmente ubicado también en suelos privados, en el centro-este del estado. Cuenta con 90 turbinas en total, cada una con una capacidad de generación de 1,5 megavatios; 13 de ellas están en suelos de fideicomisos estatales, en el borde delantero del parque eólico, con una capacidad total de 19,5 megavatios. El arancel por megavatio de aproximadamente 2,6 por ciento de los ingresos brutos produce alrededor de US$50.000 por año, según Mike Sullivan, del Departamento de Recursos Naturales y Conservación de Montana (DNRC). En el momento de su construcción, se cobró un único arancel por la instalación de US$20.000 (Rodman 2008).
Bob Quinn, el fundador de una compañía local de desarrollo eólico llamada Windpark Solutions, inició el proyecto en el año 2000, cuando le pro-puso la idea a un pequeño grupo que incluyó a representantes de la empresa de servicios públicos local, del Departamento de Calidad Medioambiental de Montana y del DNRC. Quinn dice que la colaboración cercana entre el emprendedor y el personal de estas entidades estatales fue la clave para ubicar con éxito el proyecto en suelos del fideicomiso estatal. El personal estatal también ayudó a Quinn a navegar por los trámites burocráticos, que incluyeron demoras imprevistas en el proceso de licitación requerido por el estado.
Después de realizar estudios preliminares —con un permiso de un año otorgado por medio de una licencia del uso del suelo del DNRC— los emprendedores deben presentar una solicitud ante el DNRC para proseguir con los proyectos de energía. El estado después hace una solicitud de propuestas. Los candidatos que tienen una licencia del uso del suelo no reciben tratamiento preferencial. Después de haber identificado a un candidato competente, éste tiene que realizar un estudio medioambiental, llegar a un acuerdo de compra de energía con una empresa de servicios públicos y determinar la factibilidad económica de su proyecto antes de firmar un contrato de arriendo con el DNRC. En la actualidad, los aranceles de licencias nuevas para el uso del suelo son generalmente de US$2 por acre (equivalente a 0,40 hectáreas) al año. Los costos de los acuerdos de arriendo para nuevos proyectos eólicos incluyen un arancel de instalación único de US$1.500 a US$2.500 por megavatio de capacidad instalada, y aranceles anuales del 3 por ciento de los ingresos brutos anuales o un mínimo de US$3.000 por cada megavatio de capacidad instalada (Rodman 2008, Billings Gazette 2010).
Estructura de arriendo y aranceles
Cada estado tiene un sistema de arriendo distinto para los proyectos de energía renovable en suelos de fideicomisos estatales, pero todos siguen un patrón similar. El proceso comienza en general con un arriendo de corto plazo para planificación, que permite la realización de estudios meteorológicos y de exploración. A continuación está la fase de construcción, seguida de un arriendo de largo plazo para la producción. Los pagos a la agencia que administra los suelos de fideicomisos estatales incluyen en general un monto por hectárea durante la etapa de planificación, que puede continuar durante la etapa de producción. Hay cargos adicionales por instalación de equipos, como torres meteorológicas, turbinas eólicas, colectores de luz solar, estructuras y alguna otra infraestructura. Durante la etapa de producción, el arancel se basa generalmente en la capacidad instalada o en los ingresos brutos de la planta de generación.
Desde que se completó el parque de Judith Gap en 2005, se han propuesto varios parques eólicos en suelos de fideicomisos estatales en Montana, pero ninguno de ellos ha alcanzado todavía la fase de producción. Entre éstos se incluye el proyecto de energía eólica de Springdale, un parque eólico de 80 megavatios compuesto por 44 turbinas, 8 de las cuales estarían en suelos de fideicomisos estatales. El DNRC también ha arrendado 1.200 hectáreas cerca de Martinsdale a Horizon Wind Energy para un parque eólico de 27 turbinas, de las cuales de 7 a 15 estarían en suelos de fideicomisos estatales. El parque eólico de Martinsdale podría ampliarse en el futuro a 100 turbinas (Montana DNRC).
Para que los suelos de fideicomisos estatales sean más atractivos para estos y otros emprendedores de energía renovable, el DNRC debería simplificar el proceso. Los emprendedores que han trabajado en los suelos de fideicomisos estatales en Montana han citado problemas de demoras, financiamiento, mitigación medioambiental, falta de cooperación de las empresas de servicios públicos y transmisión (Rodman 2008). Según Quinn, Judith Gap tuvo éxito en parte debido a la dedicación y colaboración cercana entre el personal estatal y el emprendedor de energía. En el futuro, el DNRC quizá tenga que asignar personal dedicado a proyectos de energía renovable para ayudar a los emprendedores con este proceso. El DNRC también podría atraer proyectos otorgando a los licenciatarios del uso del suelo un estado preferencial en el proceso de licitación y acelerando dicho proceso. Quinn señala que el sistema podría mejorar si se evaluaran las ofertas de acuerdo a la prestación, en vez de tener en cuenta solamente el precio.
Energía geotérmica, Utah
La energía geotérmica es una fuente potencial de energía constante, al compensar las fluctuaciones de las energías renovables intermitentes como la eólica o solar. No obstante, también es técnicamente compleja y cara — y por tanto inusual en los suelos de fideicomisos estatales del oeste intermontañoso. En la actualidad, Utah es el único estado de la región con plantas geotérmicas activas en suelos de fideicomisos estatales. Por superficie, la geotérmica es la mayor fuente de energía renovable en Utah, con aproximadamente 40.000 hectáreas situadas en suelos de fideicomisos estatales. En la actualidad hay dos plantas de energía geotérmica en producción que generan ingresos de entre US$200.000 y US$300.000 al año. Para los proyectos geotérmicos, la Administración de Suelos de fideicomisos estatales e Institucionales (SITLA), que administra los suelos de fideicomisos estatales en Utah, cobra un 2,25 por ciento de las ventas de electricidad durante los primeros 5 a 10 años y un 3,5 por ciento de ahí en adelante.
La planta de 34 megavatios de PacifiCorp en Blundell, en territorio de propiedad mixta privada, federal y estatal, fue la primera construida en el estado en 1984. Blundell explota una reserva subterránea que se encuentra a 1.000 metros de profundidad, a una temperatura de más de 260° C y una presión de 34 atmósferas (500 psi). Se perfora un pozo para que el agua caliente y de alta presión suba a la superficie e impulse una turbina de vapor. La planta de Blundell tiene dos unidades, una de 23 megavatios, construida en 1984, y otra de 11 megavatios, completada en 2007.
La planta más reciente de Raser en el condado de Beaver ha tenido menos éxito. Raser pensó instalar originalmente una planta de 15 megavatios usando una tecnología modular más moderna producida por United Technologies, dijo John Andrews, subdirector de SITLA. La empresa intentó reducir el costo y el tiempo de desarrollo explorando el recurso geotérmico al mismo tiempo que construía la planta de generación, en vez de perforar primero los pozos geotérmicos y después construir la planta. Desafortunadamente, el recurso geotérmico fue más escaso de lo previsto y no pudo soportar la potencia nominal de 15 megavatios. Con ingresos limitados, Raser no pudo cubrir sus deudas y se declaró en quiebra en 2011. La planta sigue funcionando con una capacidad limitada (Oberbeck 2009).
La experiencia de Raser demuestra que los costos del desarrollo geotérmico siguen siendo desa-lentadores, y que vale la pena analizar previamente en profundidad las características del recurso geotérmico disponible antes de construir las plantas de generación, si bien este paso adicional es costoso y demora tiempo. Los futuros avances tecnológicos pueden ayudar a reducir el costo y el tiempo necesario para el desarrollo geotérmico, pero dado el estado actual de la tecnología, los proyectos geotérmicos exigen todavía importantes inversiones iniciales.
SITLA es la entidad encargada de dar respuesta a los proyectos de desarrollo de energía renovable a medida que se reciben; también puede ofrecer suelos en arriendo mediante solicitud de ofertas o proceso de licitación en pliego cerrado (Rodman 2008). El estado ha hecho un mapa de zonas de energía renovable, pero la tarea de encontrar los lugares y proponer proyectos de energía renovable recae sobre los emprendedores.
Utah también enfrenta otras dificultades para todas las formas de desarrollo de energía renovable en suelos de fideicomisos. Debido a la alta proporción y el patrón de distribución de territorios federales, las agencias nacionales a veces son las que toman la iniciativa en proyectos de desarrollo de energía. Según Andrews, la ausencia de un estándar de cartera de energía renovable (Renewable Portfolio Standard, o RPS) en Utah es otra desventaja, porque las empresas locales de servicios públicos carecen de un mandato estatal para suministrar energía renovable.
Aun sin un RPS, sin embargo, Utah está bien situado geográficamente para exportar energía a otros estados, particularmente a los centros de población en la costa oeste. Aunque la transmisión de energía puede constituir un impedimento en algunas partes del estado, existe en la actualidad capacidad de transmisión entre Utah y el sur de California. Más aún, los emprendedores pueden aprovechar una serie de recursos renovables: eólico, solar y geotérmico. SITLA podría comercializar los suelos de fideicomiso en zonas de energía renovable a emprendedores potenciales, ofreciendo aranceles reducidos para proyectos en dichas zonas.
Desarrollos solares en Arizona
Incluso en Arizona, el estado más soleado de los EE.UU., según el Servicio Meteorológico Nacional, la industria solar enfrenta varios obstáculos en los suelos de fideicomisos estatales. La única planta solar activa en suelos de fideicomisos estatales, la planta solar de Foothills, se inauguró en 160 hectáreas del condado de Yuma en abril de 2013, con la puesta en marcha de 17 megavatios. 18 megavatios adicionales entrarán en operación en diciembre de 2013. Cuando se encuentre plenamente operativa, la planta dará servicio a 9.000 clientes. El contrato de arriendo de 35 años generará US$10 millones para los beneficiarios de los suelos de fideicomisos estatales, y la mayor parte de este dinero se destinará a la educación pública.
El desarrollo lento de la industria solar en de suelos de fideicomisos refleja una tendencia más amplia a nivel nacional. En 2010, sólo el 0,03 por ciento de la energía del país provino de proyectos solares, mientras que el 2,3 por ciento fue generado por el viento (www.eia.gov). Los proyectos solares en general exigen el uso exclusivo de un sitio, lo cual genera una desventaja más grande aún en los suelos de fideicomisos estatales, donde ya hay muchas otras hectáreas arrendadas para agricul-tura, pastoreo o producción de petróleo y gas. Los proyectos eólicos, en contraste, pueden coexistir con otros usos del suelo. Los proyectos solares también requieren mucha superficie, hasta 5 hectáreas por megavatio (Culp y Gibbons 2010), mientras que las plantas eólicas tienen una huella relativamente pequeña. Y, aun cuando los precios están cayendo, las plantas de generación solar pueden ser muy caras.
A pesar de estas desventajas, hay siempre maneras en que se puede adaptar el desarrollo solar a los suelos de fideicomisos estatales. Para empezar, estos territorios no pagan impuestos ni tienen deudas; como no tienen la misma carga financiera que los propietarios privados, las agencias que administran los suelos de fideicomisos tienen una ventaja para ubicar y mantener proyectos de energía renovable. Algunos emprendedores solares encuentran atractivos los suelos de fideicomisos estatales porque permiten la utilización de grandes superficies por parte de un solo propietario. La generación solar también se adapta bien a sitios que sufrieron perturbaciones previamente, como viejos rellenos sanitarios y áreas agrícolas abandonadas, que pueden incluir los suelos de fideicomisos. Cerca de las zonas urbanas, los suelos de fideicomisos estatales que están en reserva para emprendimientos futuros se podrían usar en el ínterin para generación solar; cuando los contratos de arriendo venzan, el suelo se podría usar para emprendimientos urbanos (Culp y Gibbons 2010).
Un estándar de energía renovable estatal e incentivos tributarios también podrían alentar el desarrollo solar. Algunos estados ofrecen créditos tributarios de hasta el 25 por ciento para inversiones, exenciones del impuesto sobre la propiedad, y contratos de compra con términos estándar para energía solar, garantizando un mercado a largo plazo para la generación solar.
El Departamento de Suelos Estatales de Arizona (ASLD), uno de los terratenientes más grandes del estado, con varias parcelas consolidadas de gran tamaño, se podría posicionar como socio atractivo para la industria de energía renovable (Wadsack 2009). El ASLD está dando pasos en la dirección correcta, desarrollando un sistema de mapas de energía renovable con SIG a fin de analizar la adecuación general de los suelos de fideicomisos estatales de energía renovable para la producción solar, evitando al mismo tiempo las áreas de hábitat de vida silvestre y de preservación del desierto, y reduciendo la distancia a caminos, líneas de transmisión y centros de demanda. Pero tiene que seguir avanzando y comercializar las áreas más adecuadas para energía renovable (Culp y Gibbons 2010) y facilitar el proceso a los emprendedores, que pueden desalentarse a causa de las complejas estructuras de arriendo, los requisitos de subasta pública y las exigencias de análisis medioambiental y cultural (Wadsack 2009). Cuanta más capacidad pueda construir el Departamento para ayudar a los emprendedores en este proceso, más podría florecer la industria de energía renovable en los suelos de fideicomisos estatales. Por ejemplo, el departamento podría ofrecer contratos de arriendo de largo plazo, acelerar la venta de suelos y desarrollar un sistema de arriendo de costo reducido con participación en los ingresos, diseñado específicamente para el desarrollo de energía renovable.
Recomendaciones generales para Montana, Utah y Arizona
El arriendo para energía renovable en los suelos de fideicomisos estatales es complicado. Cada estado posee un conjunto singular de circunstancias políticas, medioambientales y económicas que hace difícil establecer un método óptimo para todos. No obstante, los logros, problemas y soluciones detalladas en los ejemplos anteriores brindan algunas recomendaciones generales para alcanzar el éxito.
A nivel de la agencia que administra el fideicomiso de suelos estatales:
A nivel estatal:
Las políticas federales cumplen también un papel importante. En particular, los créditos tributarios a la producción han estimulado el desarrollo de energía renovable en las últimas décadas. Del mismo modo los créditos tributarios federales a la inversión en energía renovable, que proporcionan a los emprendedores un crédito tributario durante las fases de planificación y construcción, han ayudado al crecimiento de la industria de energía renovable en los últimos, aun cuando la economía nacional estaba en recesión. Finalmente, se han presentado varias propuestas para un estándar federal de cartera de energía renovable, si bien los investigadores no se ponen de acuerdo sobre si este tipo de política podría interferir con las políticas de RPS a nivel estatal, que han demostrado ser extremadamente efectivas.
La energía renovable ofrece a los administra-dores de suelos de fideicomisos estatales una oportunidad para diversificar sus ingresos y beneficiar el bien común. En su mayoría, los proyectos eólicos y de transmisión se pueden ubicar en terrenos que ya se han arrendado para pastoreo, agricultura, petróleo y gas. Los proyectos solares podrían tener su mayor potencial en áreas previamente alteradas o en zonas con escaso valor alternativo. Donde haya recursos geotérmicos disponibles, se podrá generar energía en forma constante para compensar las fuentes de energía intermitentes, como el viento y el sol. Los avances técnicos podrían ayudar a reducir los precios de la energía renovable, sobre todo la energía solar, geotérmica y de biomasa. A medida que nuestras demandas de energía van creciendo, los suelos de fideicomisos estatales están en condiciones de desempeñar un papel importante en el crecimiento de la industria de energía renovable.
Este artículo fue adaptado del documento de trabajo del Instituto Lincoln “Leasing Renewable Energy on State Trust Lands” (Arriendo de energía renovable en suelos de fideicomisos estatales), disponible en línea en: www.lincolninst.edu/pubs/dl/2192_1518_Berry_WP12AB1.pdf.
Sobre el autor
Alison Berry es la especialista de energía y economía en el Sonoran Institute, donde su trabajo se concentra en temas del uso del suelo en el cambiante Oeste de los EE.UU. Tiene una licenciatura en Biología por la Universidad de Vermont y una maestría en Silvicultura por la Universidad de Montana. Sus artículos han sido publicados en el Wall Street Journal, el Journal of Forestry, y el Western Journal of Applied Forestry, entre otras publicaciones. Contacto: aberry@sonoraninstitute.org.
Recursos
Berry, Jason, David Hurlbut, Richard Simon, Joseph Moore y Robert Blackett. 2009. Utah Renewable Energy Zones Task Force Phase I Report. http://www.energy.utah.gov/renewable_energy/docs/mp-09-1low.pdf.
Billings Gazette. 2010. Wind farm developers eye school trust land. April 22. http://billingsgazette.com/news/state-and-regional/montana/article_14bfb038-4e0a-11df-bc99-001cc4c002e0.html.
Bureau of Land Management. 2011. Restoration Design Energy Project. http://www.blm.gov/az/st/en/prog/energy/arra_solar.html.
Culp, Peter y Jocelyn Gibbons. 2010. Strategies for Renewable Energy Projects on Arizona’s State Trust Lands. Lincoln Institute of Land Policy Working Paper WP11PC2. https://www.lincolninst.edu/pubs/dl/1984_1306_CulpGibbon%20Final.pdf.
Montana Department of Natural Resources. 2011. Montana’s Trust Lands. Presented at the Western States Land Commissioners Association annual meeting. Online: http://www.glo.texas.gov/wslca/pdf/state-reports-2011/wslca-presentation-mt-2011.pdf accessed November 23, 2011.
Oberbeck, Steven. 2009. Utah geothermal plant runs into cold-water problems. Salt Lake Tribune. September 17. And Bathon, Michael. 2011. Utah’s Raser Technologies files Chapter 11. Salt Lake Tribune. May 2.
Rodman, Nancy Welch. 2008. Wind, wave/tidal, and in-river flow energy: A review of the decision framework of state land management agencies. Prepared for the Western States Land Commissioners Association. http://www.glo.texas.gov/wslca/pdf/wind_wave_tidal_river.pdf.
Wadsack, Karin. 2009 Arizona Wind Development Status Report. Arizona Corporation Commission.
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It is difficult to overstate how ongoing population loss has devastated Detroit. Between 1900 and 1950, when the rise of U.S. automobile manufacturing made the city one of America’s premier industrial and cultural centers, the population spiked from 300,000 to 1.85 million. Beginning in 1950, however, it began to fall. And its decline has been continuous to the present day, plummeting to just 700,000 in 2010, at a rate of descent nearly as swift as the rate of ascent in the first half of the 20th century.
Despite Detroit’s decades-long effort to keep pace with population loss by removing dilapidated housing stock, roughly a quarter of its 380,000 parcels are now abandoned, managed by the city or other public entities. As of July 2014, 114,000 properties have been razed, and 80,000 more are considered blighted (Austen 2014).
While the downtown is recovering and the suburbs remain vital, the “unfathomable dissolution of [the] built landscape” in vast areas of the city may shock the unsuspecting visitor (Austen 2014).
The first installment in a two-part series, this article considers the fiscal causes and repercussions of Detroit’s surplus of housing and vacant property: from the extent and location of abandoned homes and lots throughout Detroit to the downward spiral of house price declines leading to overassessment, property tax delinquency, and foreclosures; the public acquisition of that property; the pattern of land values across the city; and, finally, some potential ways to reconcile the remaining number of people with the amount of vacant and publicly held property. These measures range from targeting densely populated neighborhoods for redevelopment to establishing a greenbelt and reclaiming vacant parcels for public use as parks, forests, industrial buffers, retention ponds, and other open space (Austen 2014).
Factors Behind the Fall
The reasons for Detroit’s demise are numerous and perhaps too familiar. Federally subsidized transportation infrastructure, such as the Interstate highway system, facilitated rapid suburbanization, which was further enabled by permissive development codes. Racial tension, global economic forces, and corruption corroded what remained of the city proper. In the early stages of the malaise, higher-income residents, most of them Caucasian, left for the suburbs in search of a better quality of life, as shown in table1. By 1990, the African-American population had peaked as well and began to drop in the first decade of the 21st century. Beginning in the 1960s, Michigan auto manufacturing began its long, precipitous decline, disproportionately impacting Detroit and Flint. The loss of well-paying middle-class jobs further harmed the urban demographic and economic base, as households sought new employment opportunities elsewhere. Rising crime rates and continued erosion of public services induced another wave of exits.
Table 1 illustrates this downturn in the city’s demographic and economic conditions from 1950 through 2010. By 2012, according to government sources, median household income was just $25,000, less than half of the national median income. Poverty and unemployment rates were 38 and 27.5 percent, respectively. The labor force participation rate was 54 percent (compared to 63 percent nationwide), and for every 6.35 employed workers, there was one person receiving Social Security Disability benefits (compared to 1 of 12 nationwide). More than 34 percent of the city’s population received food stamps, and 81 percent of children in the Detroit Public Schools qualified for the Free and Reduced Lunch Program. Revenue streams became increasingly dependent on external sources, including nonresidents, as discussed in box 1. In 2013, when the city finally succumbed to the weight of accumulating fiscal challenges and declared bankruptcy, its debt and unfunded liabilities amounted to $18 billion—or $68,000 per household, which is about 2.7 times the median household income (Turbeville 2013).
The Failed Housing Market
The enormous excess supply of housing that accumulated over decades as a result of winnowing demand in Detroit corroded the value of that property. The real estate crisis of 2007–2008 dealt the final blow, resulting in the near-complete breakdown of Detroit’s housing market. By 2010, the average price of a residential property had plummeted to about $7,000 from $57,000 in 2006 (Hodge et al. 2014a). Detroit’s current excess of land and housing would likely suppress real estate price recovery in the coming years even if the population were to stabilize.
Property Tax Delinquency, Abandonment, and Public Acquisition of Property
Tax officials have not recalibrated assessment values to reflect house price declines. The resulting overassessment is as high as 80 percent (Hodge et al. 2014a), contributing to a general unwillingness to pay taxes, according to Alm et al. (2014). Their research also shows that additional factors such as high statutory tax rates and limited services such as public safety worsen this delinquency as well.
In the midst of the real estate crisis, property tax delinquency reached an alarming 50 percent (Alm et al. 2014). Figure 2 (p. 13) shows delinquency rates by neighborhood across the city in 2010. Property tax collection depends on a jurisdiction’s ability to impose sanctions for nonpayment of taxes, as noted by Langsdorf (1973). When real estate values collapse, taxing authorities have no workable enforcement mechanism; homeowners’ savings from nonpayment of property tax are greater than the value of the house they own and would lose in the instance of foreclosure. Further, proceeds from the sale of low-valued tax-foreclosed property are insufficient to cover back taxes owed and the government costs of initiating foreclosure proceedings.
Widespread failure to pay property taxes and the subsequent abandonment of homes has resulted in the public acquisition of thousands of properties throughout Detroit. Fifteen percent of the parcels within the 139-square-mile city are now empty, and nearly 25 percent of Detroit’s land area is now nontaxable, owned and managed by the city or some other public entity (Sands and Skidmore 2014), as illustrated in figure 3.
The Downward Spiral of Foreclosures
Currently, the number of properties flowing into public hands via tax foreclosure far outpaces the number of publicly held properties being purchased back by private taxpaying owners.
In Michigan, delinquent property taxes are subject to a 4 percent administration fee and 1 percent monthly interest on the delinquent amount computed at a non-compounded rate, beginning in the first month of nonpayment. After one year of delinquency, the city forfeits the property to county government, and the owner becomes subject to an additional 0.5 percent monthly interest charge. During this two-year period, owners may redeem their properties by paying all outstanding taxes and fees.
If property taxes go unpaid for more than two years, the Wayne County Treasurer initiates foreclosure proceedings. After a show cause hearing in the Circuit Court, the County Treasurer publicly auctions the foreclosed parcels. The starting bid equals the unpaid property taxes plus interest and penalties, and the proceeds are distributed proportionately to the taxing jurisdictions. If the property doesn’t sell at the first auction, the county lowers the minimum bid to $500 and holds a second auction. This procedure has led to further tax evasion, as some homeowners elect to ignore their tax bills with the expectation that they will be able to repurchase the parcel for $500 at the second auction.
Property that doesn’t sell at either auction may be transferred to a public body (city or state) or to a state or local land bank, or it may be held for a subsequent auction. County records indicate that 80 percent of the parcels sold to private buyers at auction over the past two years are once again delinquent on taxes (MacDonald 2013). Given that the tax delinquency rate is 67 percent for non-homestead property owners (Alm et al. 2014), it seems likely that a significant proportion of buyers at auction are absentee landlords who intend to reduce their operating expenses and increase their net rental income by never paying property taxes.
Property taxes are effectively optional on low-valued parcels as well. To minimize the backlog of tax-delinquent lots (MacDonald 2013), the county does not foreclose on homeowners who owe less than $1,600 in taxes and penalties in aggregate, effectively rendering these debts optional.
Expected revenue from the sale of low-valued parcels is insufficient to cover legal expenses associated with tax foreclosure and unpaid property tax balances. The end result is an increasing rate of delinquency and a growing inventory of unwanted property that ends up in the public sector, where it generates no revenue for the city.
Where to Go from Here?
Another wave of property tax-related foreclosures is expected in late 2014 and early 2015. What can be done to stabilize the situation?
Curbing Property Tax Delinquency
As mentioned, delinquency will abate when tax payers perceive that they receive commensurate returns for their money. Thus, improving the tax-service package by upgrading core services such as public safety will reduce evasion and lateness (Alm et al. 2014). Under the leadership of recently elected Mayor Mike Duggan, city government is taking steps to improve basic public service provision and put its fiscal house in order. For example, just 35,000 of 88,000 streetlights currently work, so Duggan plans to install 2,400 functioning streetlights per month (Austen 2014). He also increased the number of operating buses from 143 to 190, and improved snow plowing during the particularly harsh winter.
Lowering tax rates would modestly reduce delinquency as well (Alm et al. 2014). Roughly double the regional average, Detroit tax rates are at the state’s maximum of 67 mills and 85 mills per assessed value for homestead and non-homestead properties, respectively. While a reduction would improve the competitive position of the city relative to other communities in the region, currently there is no discussion of reducing property tax rates.
Aligning assessed values more closely with actual market conditions will also reduce delinquency. Mayor Duggan recently promised to lower assessments by 5 to 20 percent across the city to reconcile them with state guidelines. However, Duggan’s promised reductions are just a small fraction of the 80 percent cut needed to bring assesment to market levels, according to Hodge et al. (2014a).
Removing Land from the Market
In the absence of robust demand for land, which seems unlikely in the near future, the excess must be removed from the market for a period of time in order for real estate value to improve broadly across the city. Given that public entities now hold so much property, it is within the power of government authorities to credibly remove it from the market. Without this type of policy action, the possibility that these parcels could be quickly transferred to the private sector serves to hamper price recovery.
Currently, public lands are held by many public entities. Authorities from the City of Detroit, Wayne County, and state government are working to consolidate these parcels under a single entity that can manage them more effectively. Detroit Future City (2010) details the extent of the fragmented ownership of public lands:
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Public land in Detroit is held by many separate agencies, including city, county, and state agencies, as well as autonomous or quasi-governmental entities such as the Detroit Public Schools, the Detroit Housing Commission, and the Detroit Economic Growth Corporation. Few other cities have such fragmented holding of their public land inventory. There is no consistency of policy, procedure, or mission among these agencies, while many are hamstrung by burdensome legal requirements and complex procedures. The Department of Planning and Development controls the largest number of properties, yet its ability to do strategic disposition is constrained by procedural obstacles, including the need to obtain City Council approval for all transactions, however small and insignificant from a citywide perspective.
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While this consolidation process is necessary, it is not sufficient. Financial resources are required to remove blight and implement land use plans. City leaders are focused mainly on strategies to return these parcels to private ownership. If they can stimulate greater interest in Detroit property, this approach might be viable.
Indeed, opportunities for private ownership are emerging in the central business district (CBD). Daniel Gilbert, founder of Quicken Loans, has moved his headquarters to downtown Detroit and invested $1.3 billion in city real estate (Forbes 2014). And downtown renewal has led to substantial rental price increases (Christie 2014).
Land values are very high in the CBD, as depicted in figure 4 (p. 16) by the black parcels, which represent the very highest land values on the map. Detroit’s land value gradient is very steep, however. While several areas within the donut around the CBD have retained some worth, land values plunge rapidly as distance from the CBD increases, though they rise again near the city’s border, probably because amenities such as shopping are available in the nearby suburbs.
Given the weak demand outside the CBD, it may be more effective to determine which publicly held properties should return to private taxpaying parties, which properties should be taken off the market for a decade or two, with the option of returning land to the market should conditions change, and which should be permanently removed from the market.
The 2012 master plan, as outlined by Detroit Future City, calls for the reclamation of land for parks, forests, industrial buffers, greenways, retention ponds, community gardens, and even campgrounds (Austen 2014). Full implementation of this ambitious proposal requires significant financial resources. But consider how state and federal authorities intervened in the last major episode of mass tax foreclosure. During the Great Depression, many homesteaders on marginal agricultural lands in Michigan, Minnesota, and Wisconsin were unable to pay their property taxes, and this default resulted in a mass wave of tax delinquency, foreclosure, abandonment, and eventual forfeiture. In these states, county governments frequently became the owners of thousands of acres, much of which was eventually sold to the state and federal governments. The six national forests in Minnesota, Wisconsin, and Michigan, as well as the region’s numerous state forests, all have origins in this mass land abandonment of the Depression Era, as state and federal authorities pieced together a patchwork of adjacent lands purchased from counties eager to sell off their tax-forfeited property.
Today, state and federal authorities have no taste for a Detroit “bailout.” But history suggests that state and federal governments could help Detroit regain fiscal viability by purchasing patchworks of unwanted parcels, making payments in lieu of taxes, as is typical for other publicly owned lands, and then using the land for the benefit of the general public. Potential uses are mapped out in the aforementioned city master plan which the second installment of this series will explore. A federal, state, and local government partnership to reclaim these properties could help stabilize the land market and generate a revenue stream for the city and the other overlying taxing jurisdictions (including the state government via the state education tax). Property value recovery in combination with downtown reinvestment, continued efforts to improve Detroit’s tax-service package and remove blight, and long-run investment in Detroit’s human and social capital are essential elements of a sustainable Detroit recovery.
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Box 1: Targeting Nonresidents for Revenue
Detroit’s revenue streams have become increasingly dependent on external sources, including nonresidents, as its population and economic base have declined. This shift occurred in part because over time Michigan state legislatures empowered the City of Detroit to use tax-exporting strategies to help shore up weakening fiscal conditions and deal with massive structural changes to the regional economy. While there were periods during which it appeared that Detroit was on the cusp of recovery, various forces prevented “escape velocity.”
Today, the City of Detroit relies on the income tax, property tax, casino wagering tax, state revenue sharing, a utility user’s tax, federal grants, and various fees and licenses to fund public services. Of these, the casino wagering tax and the city income tax were adopted to bolster fading revenues from more traditional sources.
The casino wagering tax, based on gamers’ winning receipts, has become particularly important to the City of Detroit over the last decade, as shown in figure 2, which summarizes trends in the city’s major revenue sources from 1960 through 2012. The state legislature authorized casino gaming activity and the wagering tax in Detroit in 1996, to help the city address its fiscal challenges. By 2001, casino construction had been completed. The $180 million in additional annual revenues helped to stave off financial pressures even as other sources, such as income taxes and state shared revenues, were in decline. Up to 85 percent of gamers at the three major Detroit casinos are nonresidents, according to recent reports and interviews with gaming experts (Miklojcik 2014).
Since 1963, the city income tax has represented Detroit’s largest and, for a number of years, fastest-growing revenue source. At the time of adoption, the majority of the income tax was paid by city residents. As Detroit’s population has declined, however, the income tax on nonresidents who work in the city has become an increasing share of the city income tax base, composed of wages and salaries earned at a city-based job. The tax rate is 2.4 percent for city residents, whereas nonresidents pay 1.2 percent. While corporations and partnerships also pay an income tax, it is a very small portion of total revenues collected. According to Scorsone and Skidmore (2014), about half of the city income tax revenue in Detroit is paid by nonresidents.
State revenue sharing continues to play a critical role in Detroit’s finances, though population loss has diminished even this income source. In Michigan, state government collects a statewide sales tax and then shares a portion of the proceeds with municipal governments. Sales tax revenues are allocated to local governments based on constitutional provisions as well as state statute. The constitutional portion of revenue sharing is based on each jurisdiction’s share of the total state population. Given the dwindling number of Detroit residents, this portion of state revenue sharing has been falling for decades. The city experienced significant growth in total revenue sharing funds through the 1970s and 1980s, due to increases in statutory revenue sharing, which is distributed by formulae that have been changed by legislators many times in recent decades. But new changes to the statute combined with stagnation in the sales tax led to declining growth and eventual decline in revenue sharing for cities across the entire state in the 1990s. As Michigan entered a decade-long recession, this decline continued for most local jurisdictions, including Detroit, through the 2000s.
Some have pointed to revenue sharing reductions as a major source of stress for the City of Detroit, and a major catalyst for the bankruptcy. However, these declines affected all cities that received revenue sharing in Michigan; while cuts to revenue sharing likely influenced the timing of Detroit’s bankruptcy, they were not the ultimate cause. Further, it is important to note that revenue sharing for Detroit represents a net positive transfer of funds from the rest of the state to the city. According to the 2007 economic census, retail sales in the City of Detroit were $3.2 billion, or about 2.9 percent of the $109 billion in the State of Michigan.
In 2012, total state revenue sharing to all municipalities in Michigan was about $1 billion, and Detroit’s share of the total was $172 million, or 17.2 percent. Given that Detroit represents just 3 percent of total state retail sales in Michigan, one can conclude that the majority of state revenue sharing that flowed to Detroit originated from retail transactions that occurred outside the city.
As of 2014, the City of Detroit had approximately a $1 billion General Fund, considerably lower than in 2002 when revenue peaked at $1.4 billion. A 30 percent drop in revenues over time without a commensurate cut in expenditures led to the Detroit fiscal crisis and the eventual declaration of bankruptcy in 2013. By 2012, Detroit had borrowed more than $1 billion in an attempt to stave off default and a liquidity crisis (Michigan Department of Treasury 2013).
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About the Author
Mark Skidmore is professor of economics at Michigan State University, where he holds the Morris Chair in State and Local Government Finance and Policy, with joint appointments in the Department of Agricultural, Food and Resource Economics and the Department of Economics.
References
Alm, J., T. Hodge, G. Sands, and M. Skidmore. 2014. “Detroit Property Tax Delinquency—Social Contract in Crisis.” Lincoln Institute of Land Policy Working Paper.
Austen, B. 2014. “The Post-Apocalyptic Detroit.” New York Times, July 13. http://nyti.ms/1mFu3Jn
Center for Educational Performance and Information. Accessed in July 2014 from www.michigan.gov/cepi/0,4546,7-113-21423_30451—,00.html
City of Detroit. 2013. Comprehensive Annual Financial Report. www.detroitmi.gov/Portals/0/docs/finance/CAFR/Final%202012%20Detroit%20Financial%20Statements.pdf
Christie, Les. 2014. “I’ve Been Priced Out of Downtown Detroit.” CNN Money, May 27. http://money.cnn.com/2014/05/27/real_estate/downtown-detroit/index.html
Detroit Future City. 2010. Detroit Future City Strategic Framework Book. http://detroitfuturecity.com/framework
Forbes. 2014. “World’s Billionaires.” www.forbes.com/profile/daniel-gilbert
Hodge, T., D. McMillen, G. Sands, and M. Skidmore. 2014a. “Tax Base Erosion and Inequity from Michigan’s Assessment Growth Limit: The Case of Detroit.” Lincoln Institute of Land Policy Working Paper.
Hodge, T., G. Sands, and M. Skidmore. 2014b. “The Land Value Gradient in a (Nearly) Collapsed Urban Real Estate Market.” Lincoln Institute of Land Policy Working Paper.
Landsdorf, K. 1973. “Urban Decay, Property Tax Delinquency: A Solution in St. Louis.” The Urban Lawyer 5: 729–748.
MacDonald, C. 2013. “Half of Detroit Property Owners Don’t Pay Taxes.” The Detroit News, February 12.
Michigan Department of Treasury. 2013. Supplemental Documentation of the Detroit Financial Review Team. www.michigan.gov/documents/treasury/Review_Team_Report_Supplemental_2–19-13_411866_7.pdf
Michigan Department of Treasury. 2010. Real Property Tax Forfeiture and Foreclosure. www.michigan.gov/taxes/0,4676,7-238-43535_55601—,00.html
Miklojcik, J. 2014. President of Michigan Consultants. Information shared in personal interview with Eric Scorsone.
National Public Radio. 2014. “Chinese Investors Aren’t Snatching up Detroit Property Yet.” www.npr.org/2014/03/04/285711091/chinese-investors-arent-snatching-up-detroit-property-yet
Sands, G. and M. Skidmore. 2014. “Making Ends Meet: Options for Property Tax Reform in Detroit.” Forthcoming in Journal of Urban Affairs.
Scorsone, E. and M. Skidmore. 2014. “Blamed for Incompetence and Lack of Foresight and Left to Die.” Response to William Tabb’s “If Detroit Is Dead Some Things Need to Be Said at the Funeral.” Forthcoming in Journal of Urban Affairs.
Turbeville, W. 2013. “The Detroit Bankruptcy.” Demos, November 20. www.demos.org/publication/detroit-bankruptcy
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Una versión más actualizada de este artículo está disponible como parte del capítulo 5 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.
¿Es la segregación espacial urbana una consecuencia del funcionamiento normal de los mercados inmobiliarios urbanos, reflejo de las preferencias individuales acumulativas, o es más bien resultado del mal funcionamiento de mercados inmobiliarios urbanos que privatizan los beneficios sociales y socializan los costos privados? ¿Proviene quizás de prejuicios contra ciertas clases o razas? ¿Crean guettos las políticas de viviendas de interés social, o los crean las acciones de agentes y prestamistas inmobiliarios que ponen sus prejuicios personales por encima de toda objetividad, generando y alimentando estereotipos sobre conciudadanos y vecindades? ¿Podrían cambiar los patrones de asentamiento intrametropolitanos si se modifica la política del suelo, o para ello es imperativo que se produzcan transformaciones sociales profundas relacionadas con valores como tolerancia, oportunidad y derechos humanos?
Treinta y siete académicos y asesores de trece países se enfrentaron a éstas y otras preguntas afines en el “Seminario Internacional sobre Segregación en la Ciudad” organizado por el Instituto Lincoln en Cambridge, Massachusetts durante el pasado mes de julio. Los organizadores del seminario, Francisco Sabatini (Universidad Católica de Chile) Martim Smolka y Rosalind Greenstein (Instituto Lincoln) plantearon una amplia gama de aspectos para explorar las dimensiones teóricas, históricas y prácticas de la segregación. Los participantes, procedentes de países tan diversos como Brasil, Israel, Kenya, Países Bajos, Irlanda del Norte y los Estados Unidos, trajeron consigo su formación profesional como juristas, sociólogos, economistas, planificadores urbanos, científicos regionales y geógrafos. A medida que intentaban llegar a un acuerdo sobre el significado de la segregación, las fuerzas diversas que la crean y la refuerzan, y las respuestas políticas posibles, se fue haciendo obvio que no hay respuestas simples y que muchos puntos de vista contribuyen al debate interminable. Este breve informe sobre el seminario ofrece una muestra de esta discusión.
¿Qué es la segregación y por qué es tan importante?
El trabajo de Frederick Boal (Escuela de Geografía, Universidad de Queens, Belfast) es fruto del gran caudal de literatura sociológica sobre segregación y su propia experiencia de vida en medio de los conflictos entre católicos y protestantes en Irlanda del Norte. Boal sugirió que la segregación debe entenderse principalmente como parte de un espectro que abarca desde el movimiento extremista de limpieza étnica hasta el más idealista de asimilación (véase la fig. 1). Tal como pasa con tantos temas vinculados con políticas, para estudiar el problema de la segregación es preciso observarla, más que como una dicotomía, como un continuo de grados o niveles de separación, cada uno con diferentes manifestaciones espaciales.
Para Peter Marcuse (Escuela de Posgrado de Arquitectura, Conservación y Planificación, Universidad de Columbia, Nueva York), la segregación supone la imposibilidad para elegir o la presencia de coerción, o ambas. Marcuse llama “agrupaciones en enclaves” a grupos de diferentes razas o etnias que deciden vivir juntos por voluntad propia. Por otra parte, llama “segregación en guettos” cuando a los grupos se los obliga a vivir aparte, bien sea explícitamente o a través de mecanismos más sutiles. La clave que distingue a estos dos patrones—la imposibilidad para elegir—invita a una respuesta del orden público.
El significado y la importancia de la segregación varía según el contexto histórico. Para William Harris (Departamento de Planificación Urbana y Regional, Universidad Estatal de Jackson, Mississippi), escritor de temas de segregación espacial en el sur de los Estados Unidos, la segregación no puede entenderse ni tampoco enfrentarse sin un conocimiento profundo del papel que ha desempeñado y sigue desempeñando la raza en la historia de los Estados Unidos y del orden público. Flavio Villaça (Escuela de Arquitectura y Urbanismo, Universidad de São Paulo, Brasil) entiende la segregación dentro de un marco conceptual de clases, en donde los factores principales que influyen en los patrones residenciales son el nivel de ingresos y el estatus social, y no la raza. En Brasil y muchos otros países con larga historia de regímenes autoritarios, el estado suele encargarse de prestar los servicios urbanos. En estos países, los patrones residenciales urbanos determinan el acceso a agua y a instalaciones sanitarias (y por tanto, a la salud) así como a medios de transporte, infraestructuras de servicios públicos y otros servicios urbanos.
Según Villaça y otros, en muchos casos la actividad del mercado del suelo y las regulaciones y los códigos urbanos se han aplicado de maneras furtivas o incluso abiertamente para crear vecindades selectas bien dotadas de servicios que separan las clases superiores del resto de la sociedad, al cual prácticamente se le hace caso omiso. Este cuadro tiene paralelismos en los Estados Unidos, en donde el acceso a escuelas de alta calidad y a otras valiosas amenidades lo determinan fundamentalmente patrones residenciales que tienen estrecha relación con la segregación, ya sea por nivel de ingresos, raza u otras características demográficas. Igualmente, los participantes del seminario señalaron la correlación entre las comunidades precarias y la situación de los peligros ambientales. Las zonas de barrios o guettos pobres, habitadas generalmente por personas de raza negra, son el vertedero de los aspectos negativos del mundo urbano moderno, como lo son desechos peligrosos y otros usos indeseados del suelo.
Ariel Espino (Departamento de Antropología, Universidad de Rice, Texas) presentó un análisis del uso de la distancia para reforzar desigualdades sociales, políticas y económicas en la vivienda. Cuando las diferencias sociales y económicas están claramente especificadas y entendidas, las élites dominantes “toleran” la proximidad física. Por ejemplo, los sirvientes pueden vivir cerca de sus patrones, incluso en la misma casa, porque las relaciones económicas y las normas de comportamiento dictan la separación por clases.
¿Por qué persiste la segregación?
Una suposición que prevaleció a lo largo del seminario fue la de que todos los residentes de la ciudad (es decir, los ciudadanos) deberían tener acceso a los servicios urbanos, o al menos a un nivel mínimo de servicios. Sin embargo, Peter Marcuse lanzó al grupo la idea de pensar más allá de un nivel mínimo y de considerar el acceso a amenidades urbanas en el contexto de los derechos. Se cuestionó si la riqueza, la herencia familiar, el color de la piel o la identidad étnica deberían ser los factores determinantes en el acceso a los bienes públicos, no sólo educación, salud y abrigo, sino también a otras amenidades directamente relacionadas con la ubicación física. Expresándose en un lenguaje evocador de las ideas de Henry George sobre la propiedad común a finales del siglo XIX, Marcuse preguntó si era justo o correcto, por ejemplo, que los ricos disfrutaran de las mejores vistas de océanos, ríos u otras bellezas naturales, mientras que los pobres estuvieran relegados a zonas menos atractivas.
Robert Wassmer (Departamento de Orden Público y Administración Pública, Universidad Estatal de California) describió los procesos económicos involucrados en la ubicación residencial, tal como los entienden los economistas de la escuela del “public choice” (decisiones públicas). Según esta perspectiva, los compradores de viviendas eligen no sólo una casa y su terreno, sino también un diverso grupo de ventajas que varían según el sitio. Algunos compradores pueden optar por un paquete de conveniencias que ofrece más sistemas de transporte público y menos vistas panorámicas, mientras que otros pueden preferir mayor acceso a autopistas y a escuelas públicas de mejor calidad. Sin embargo, no todos los ciudadanos tienen las mismas oportunidades para hacer esas selecciones. Varios participantes añadieron que este debate forma parte de una discusión más amplia sobre acceso y selección en la sociedad, dado que casi todas las opciones están restringidas hasta cierto grado, y que muchas restricciones varían sistemáticamente entre los grupos sociales.
Otros participantes señalaron las maneras en que las políticas gubernamentales (p. ej., sistemas tributarios, legislación de vivienda) e instituciones privadas (p. ej., agentes de bienes raíces, instituciones prestamistas) actúan en conjunto para influir en el comportamiento de los mercados inmobiliarios, y por consiguiente, en el efecto de las políticas del suelo en acciones públicas y privadas. Greg Squires (Departamento de Sociología, Universidad de George Washington) informó de un estudio sobre el proceso de búsqueda de vivienda en Washington, DC. Sus hallazgos ponen en evidencia el papel que desempeñan los agentes de bienes raíces al “orientar” a compradores e inquilinos hacia vecindades de las mismas razas. Como resultado fundamental, los negros no disfrutan de las mismas oportunidades que tienen los blancos y sus posibilidades de obtener su solución habitacional preferida son menores, lo cual se contrapone al modelo de “public choice”. Entre los hallazgos de Squires está el hecho de que la selección de la vivienda está determinada por el estatus social o económico. Por ejemplo, en el proceso de búsqueda de vivienda, las amenidades más solicitadas por los clientes negros difirieron de aquéllas preferidas por los blancos, en parte porque aquéllos disponían de menos recursos particulares (tales como automóviles) y requerían viviendas situadas cerca de servicios centralizados tales como transporte público.
John Metzger (Programa de Planificación Urbana y Regional, Universidad del Estado de Michigan) examinó la influencia del mercado privado en la perpetuación de la segregación. Metzger presentó investigaciones sobre perfiles grupales demográficos usados por compañías como Claritas y CACI Marketing Systems para caracterizar los vecindarios. Dichos perfiles se venden a una amplia gama de industrias, entre ellas agencias inmobiliarias y financieras, como también a entidades públicas. La industria inmobiliaria se vale de los perfiles para alimentar el proceso decisorio de comercialización, planificación e inversión, y —señala Metzger— para propiciar enclaves de razas y la persistencia de la segregación. Las instituciones de préstamos hipotecarios se valen de los perfiles para determinar la demanda del consumidor. Los planificadores urbanos, tanto asesores privados y del sector público, usan los perfiles para la determinación de usos futuros del suelo, para la planificación a largo plazo y para guiar las actividades de planificación e inversión de distritos comerciales centrales, mientras que los promotores de bienes raíces los usan para definir sus mercados y demostrar las demandas aceleradas de sus productos. Los perfiles en sí suelen estar basados en estereotipos raciales y étnicos, y a su vez refuerzan la separación de grupos raciales y étnicos dentro de los mercados de bienes raíces regionales.
Xavier de Souza Briggs (Escuela de Gobierno John F. Kennedy, Universidad de Harvard) introdujo la idea de “capital social” en la discusión. El término “capital social”, tal como lo emplean actualmente sociólogos y expertos en teoría sociológica, encarna las redes y relaciones sociales dentro las comunidades, que pueden aprovecharse para el logro de metas individuales y comunes. Briggs argumentó que si bien el capital social es, al mismo tiempo, causa y efecto de la segregación en los Estados Unidos, también puede utilizarse para crear cambios positivos. Otros participantes cuestionaron la eficacia de la teoría y las investigaciones en capital social para resolver el problema de la segregación espacial urbana, señalando que éstas tendían a limitarse a la cuestión de “cómo mejorar la situación de los pobres” en vez de estudiar los mecanismos estructurales e institucionales que contribuyen a la segregación residencial y a la desigualdad de la renta. No obstante, los sociólogos opinan que el capital social es justamente lo que necesitan las comunidades para tener cierto control sobre sus ambientes inmediatos, en vez de ser simples receptoras de las consecuencias previstas e imprevistas de la economía política.
Justicia social y política del suelo
Durante el seminario, participantes de distintas partes del mundo dieron ejemplos de casos de segregación espacial utilizada como estrategia política por los poderes estatales:
Las conexiones entre estas formas extremas de segregación espacial y las fuerzas de mercados y políticas inmobiliarias de la mayoría de las ciudades modernas son complejas y difíciles de articular. Uno de esos vínculos se refleja en las maneras como se continúan aplicando las políticas inmobiliarias y las instituciones que apoyan los mercados inmobiliarios para brindar legitimidad a las prácticas discriminatorias.
Al imaginarse un mundo de ciudades cuyos habitantes tengan verdadera libertad para escoger dónde vivir, los planificadores del seminario se concentraron en políticas y programas gubernamentales que facilitan la integración, tales como el programa “Moving to Opportunity” del Departamento de Vivienda y Desarrollo Urbano de los Estados Unidos. Sin embargo, Stephen Ross (Departamento de Economía, Universidad de Connecticut) cuestionó los supuestos beneficios de las políticas de integración o repoblación lanzando esta pregunta: “¿Qué pasaría si dispersáramos personas de altos ingresos por toda la ciudad? ¿Qué cambiaría? ¿Nos ayuda esto a considerar con más detenimiento la importancia del espacio?”
Otra pregunta de Xavier Briggs obligó a los participantes a pensar en dónde se producen la mayoría de las interacciones sociales significativas. Específicamente, ¿qué debe pasar —y en qué circunstancias— para ir desde el movimiento extremo de limpieza étnica (según el espectro étnico urbano mencionado por Boal) al extremo opuesto de la asimilación? Briggs sugirió que es posible que instituciones como escuelas y lugares de trabajo estén en más capacidad de facilitar la diversidad en las interacciones sociales, que los vecindarios residenciales.
Al fin y al cabo, los planificadores urbanos desearían que se usen sus herramientas para formar ciudades que ofrezcan justicia para todos. Hablando de las condiciones de los ciudadanos árabes en la ciudad mixta de Lod, Haim Yacobi (Departamento de Geografía, Universidad de Ben-Gurion, Israel), tocó los cimientos de los ideales democráticos occidentales al preguntar lo siguiente: “Si una persona no tiene acceso total a la ciudad, si no puede participar de lleno en la vida de la ciudad, ¿está esa persona viviendo en una ciudad verdadera?”
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Like many fast-growing areas across the country, the Bluegrass region of central Kentucky is dealing with two complementary growth management issues:
Civic leadership for this critical planning process is provided by Bluegrass Tomorrow, a non-profit, community-based organization formed in 1989 to ensure that the region’s extraordinary resources-physical, natural and fiscal-are soundly managed for the future. Bluegrass Tomorrow works within the seven-county area for solutions that build a strong and efficient economy, a protected environment and livable communities. The organization accomplishes its goals by promoting regional dialogue and collaborative goal-setting among diverse interests, facilitating public, private and corporate sector cooperation, and developing innovative planning solutions to growth and conservation concerns.
The guiding framework for Bluegrass Tomorrow is the Bluegrass Regional Vision that was developed in 1993 through a broad-based regional planning process. In seeking to maintain a clear definition between town and country, this Vision reflects the region’s legacy of a large urban center (Lexington) surrounded by smaller, distinct cities and towns. These communities are separated and yet connected by a beautiful greenbelt of agricultural land and areas rich in environmental and historic resources.
Smart Growth Choices
Continuing a partnership established in the early 1990s, the Lincoln Institute and Bluegrass Tomorrow cosponsored a conference in October that focused on smart growth choices for the region. The conference was designed to bring together public officials, business interests and concerned citizens to revisit the Regional Vision, discuss why that Vision remains important for good business, good cities and a good environment, and to explore how it is being unraveled by current development pressures. Through a combination of keynote addresses, plenary sessions and interactive workshops, participants learned about smart growth principles and evaluated the appropriateness of various approaches and models to their region.
William Hudnut, senior resident fellow at the Urban Land Institute in Washington, D.C., discussed the characteristics of smart growth, which are also the goals of the Bluegrass Regional Vision:
The conference program highlighted three smart growth themes, offered illustrative case studies from other regions in the U.S., and provided opportunities for participant feedback on promising directions and possible obstacles.
Planning and Paying for Infrastructure
The Bluegrass region’s ability to create incentives to promote smart growth practices is often limited because local governments are always in the business of playing “catch up.” This creates a problem because of the need for local government to be able to use public infrastructure to promote development in areas appropriate for growth, away from rural conservation areas, and to help in the purchase of development rights to protect the Bluegrass farmland.
Paul Tischler, a fiscal, economic and planning consultant from Bethesda, Maryland, advocated that government use a capital improvement plan to address this problem. This planning tool allows governments to create a comprehensive approach to current and future needs in one integrated program. It establishes goals for what projects are needed and how and when to pay for them. Peter Pollock of the Boulder, Colorado, Planning Department presented a case study of how his city has implemented a capital improvement program that addresses capital facilities planning and budgeting, equity concerns and linkage of service availability to development approval.
Infill Development
Promotion of more intense development and redevelopment within established cities and towns in the Bluegrass is a critical smart growth issue. It encourages more efficient use of the region’s highly valued Bluegrass farmland and makes better use of existing infrastructure. Too often, however, developers are required to reduce the density of development to respond to neighborhood concerns about incompatibility with the existing community character. As a result, land within urban areas is being used less efficiently, which increases the pressure to convert farmland on the edge of developed areas into future home sites.
To address this problem, Nore Winter, an urban design review consultant in Boulder, Colorado, discussed how communities can make sure that infill and redevelopment enhance the community and the quality of life in the surrounding neighborhood. He explained how to avoid “generica” by defining community character and using design guidelines to improve new developments with visual examples that demonstrate the type of development that is preferred. David Rice, executive director of the Norfolk, Virginia, Redevelopment and Housing Authority, shared examples of infill development projects in that city, which has successfully created quality neighborhoods, encouraged community participation and addressed difficult zoning, design and permitting concerns.
Regional Cooperation
The seven central Bluegrass counties constitute a highly integrated region in terms of land use, economy, and natural and cultural resources. Decisions in one county can have a long-term impact on another county. Although Bluegrass Tomorrow has drawn the region together to work on these issues, the current rate of change requires more intensive planning and coordination.
Curtis Johnson, president and chairman of the Metropolitan Council of the Twin Cities area in Minnesota, explored with conference participants many examples of additional steps that can be taken to promote regional cooperation. The good news for the Bluegrass, Johnson noted in his opening observations, is that unlike some regions of the U.S., the Bluegrass is still able to make important choices. He cautioned, though, that any region has only a few opportunities to get it right, and that there is no magic solution. He also offered several succinct ideas about regionalism: “setting a bigger table, including those who disagree,” “it’s never over,” and “no one is excused.”
Next Steps
Conference participants and local community and political leaders who held a follow-up meeting concluded that the region needs to explore seven action steps to build on the ideas generated by the conference speakers and discussion sessions.
1. Encourage communities to put in place a well-communicated and clearly explained capital improvement plan to help build community confidence that government can meet and pay for the needs of local communities and the region as a whole. The plan should match services to regional growth and build consensus among diverse interest groups about which areas are to be designated as urban and which will remain rural.
2. Promote infill development by using a redevelopment authority to build downtown housing, redevelop old strip centers and explore new projects in overlooked urbanized areas.
3. Develop design guidelines for infill and redevelopment projects that work as a friend, not a foe. The guidelines should be developed in partnership with the neighbors to build confidence in the process, remove fear of the unknown, and set a design framework rather than dictate a particular design style.
4. Use Bluegrass farmland as the niche or “brand identity” when marketing the Bluegrass as a location.
5. Educate the business community, especially the lending community, about the reasons for and benefits of smart growth.
6. Address concerns over economic winners and losers in the region, and undertake economic planning accordingly.
7. Build on collaborative regional efforts now in place and the common sense of place in the Bluegrass to strengthen regional planning efforts. This involves taking care to maximize alliances among groups and to balance strategic long-term planning with specific actions.
What will become of these ideas? If the past is any measure, over the next several months the leaders and citizens of the Bluegrass region will sort out which of these ideas will work best, and they will form the coalitions necessary to make them work. Bluegrass Tomorrow will continue to provide a unique model of private sector leadership on smart growth issues in collaboration with the region’s public officials and community residents.
Jean Scott is executive director of Bluegrass Tomorrow, based in Lexington, Kentucky, and Peter Pollock is director of community planning in Boulder, Colorado, and a former visiting fellow of the Lincoln Institute. Together they developed and organized the conference on Smart Growth for the Bluegrass.
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Rapid urban growth, concentrated land ownership, and land use regulations often contribute to a scarcity of land serviced by public infrastructure, which facilitates huge increases in land prices and incredible speculative gains. When the legal and administrative framework cannot be changed easily to let markets operate gradual price adjustments that can be taxed via existing property and capital gains taxes, value capture is a suitable approach to attain equity, efficiency and sustainable urban development.
Value capture in Colombia
This article examines the implementation of value capture in the Colombian cities of Bogota and Cali. In the early 1990s these two cities adopted land use regulations aimed at expanding their supplies of residential land and needed a way to capture most of the increases in land values that may be attributed primarily to authorized changes in land use. Implementation of the new value capture instrument poses formidable challenges to Colombian city administrators, who must identify those increases in value that are due primarily to administrative decisions.
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Under conditions of rapid urban growth, concentrated land ownership and land use regulations often contribute to a scarcity of land serviced by public infrastructure. This scarcity in turn facilitates huge increases in land prices and incredible speculative gains. When the legal and administrative framework cannot be changed easily to let markets operate gradual price adjustments that can be taxed via existing property and capital gains taxes, value capture is a suitable approach to attain equity, efficiency and sustainable urban development.
In the early 1990s two Colombian cities, Bogota and Cali, adopted land use regulations aimed at expanding their supplies of residential land. Bogota released an attractive reserved site in the middle of the city known as “El Salitre,” with the intention of providing additional infrastructure and establishing special regulations to ensure low- to middle-income housing. Cali expanded its urban perimeter to include a substantial piece of swampland known as “Ciudadela Desepaz,” which needed extensive infrastructure investment. The city planned to provide basic infrastructure to encourage both its own housing department and private developers to build low-income housing.
The very announcement that the respective city councils were about to promote development raised the land prices significantly. In the case of Cali, registered land transactions in Ciudadela Desepaz reflected price increases of more than 300 percent even before the City Council made its formal decision. Land quickly changed hands from a scattered group of relatively unknown cattle ranchers (and, it was documented later, some foreign and domestic drug traffickers) to land speculators and land developers. A series of administrative decisions over a 30-month period pushed land with virtually no market value to a price of more than 14,000 Colombian pesos per square meter (about US$18 in 1995). These decisions resulted in overall gains of more than 1,000 times the original land price after accounting for inflation.
El Salitre in Bogota followed a similar path of decisions by the city administration that raised the price of land substantially. Needless to say, residential housing is being occupied in both cases by middle- to high-income people, not the intended lower-income sectors.
Since cases like Desepaz and El Salitre occur regularly in major Colombian cities, the national government prepared a bill to allow cities to capture most of the increases in land values that may be attributed primarily to authorized changes in land use. Such changes include zoning, density allowances or the conversion of land from agricultural to urban uses. The bill, inspired by similar yet less stringent measures in Spanish and Brazilian laws, was passed by the Colombian Congress as Law 388 of 1997.
Colombian income tax laws, including the successfully applied Contribution de Valorizacion, a betterment levy limited to the cost recovery of public investments, are not effective in capturing the kind of extreme capital gains as seen in Desepaz or El Salitre. Law 388 of 1997, known as the Law for Territorial Development, offers several options for how local authorities may “participate in the plus-valias” through payment of the new “contribution for territorial development.” Cities and property owners may negotiate payment in cash, in kind (through a transfer of part of the land), or through a combination of payment in kind (land) plus the formation of an urban development partnership, for instance, between the owners, the city and developers.
Implementation of this new value capture instrument poses formidable challenges to Colombian city administrators, who must identify those increases in value that are due primarily to administrative decisions. The challenges include measuring the relevant increase in the value of the land, negotiating the forms of payment and establishing partnerships for urban development purposes.
As part of its research and education program in Latin America, the Lincoln Institute has been working with Colombian officials since 1994 to provide training and technical support during the successive stages of preparing the regulations and implementing Law 388 of 1997. The Institute plans to work with other countries experiencing land pricing problems so they may consider value capture measures similar to the Colombian law.
Fernando Rojas, a lawyer from Colombia, is a visiting fellow of the Lincoln Institute this year. He and Victor M. Moncayo, currently president of the National University of Colombia, drafted the bill that later became Law 388. They also worked with Carolina Barco de Botero, a member of the Lincoln Institute Board of Directors, who at the time was head of the United Nations Development Program, which oversaw preparation of the bill for the national government. Martim Smolka is senior fellow for Latin America and Caribbean Programs at the Institute.
* Value capture refers to fiscal and other measures used by governments to earmark the portion of land value increments attributed to community effort rather than to actions of the landowner. In Latin America, these land value increments are often referred to as plus-valias.
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Una versión más actualizada de este artículo está disponible como parte del capítulo 1 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.
En el marco de una reestructuración económica, la privatización y la globalización, el problema de las tierras urbanas y los conflictos sobre su uso representan una prioridad fundamental para El Salvador. Son muchos los factores que contribuyen al estado crítico de la administración de la tierra en el país:
El Instituto Lincoln trabaja junto con el Programa Salvadoreño de Investigación y Medio Ambiente (PRISMA) para lograr la presentación de una serie de seminarios para funcionarios de alto nivel en el gobierno nacional y municipal, así como agentes de la industria de desarrollo privada y representantes de organizaciones no gubernamentales. Los dos grupos patrocinaron un curso sobre el funcionamiento de los mercados de tierra urbanos durante la primavera pasada, y durante este otoño proseguirán con un curso sobre “Los instrumentos de regulación para el uso de las tierras urbanas”.
Este programa se enfoca en la necesidad urgente de crear instrumentos económicos y de regulación para promover la administración estratégica de las tierras urbanas, para contribuir con el proceso de democratización en curso y apoyar el desarrollo sustentable. El curso es particularmente oportuno porque El Salvador está en el proceso de establecer un ministerio del ambiente y redactar una legislación para encargarse de problemas de organización territorial.
Mario Lugo Ucles es investigador afiliado de PRISMA (Programa Salvadoreño de Investigación y Medio Ambiente) en El Salvador.
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Governments have often intervened in land markets in Asian cities, but with limited effects. In recent decades, economic globalization and political democratization have created even stronger demands for more efficient and equitable land use policies. Rapid economic growth in cities with scarce land resources has generated a wave of new thinking on land values and land markets among scholars and policymakers.
The GATT (General Agreement on Tariffs and Trade) negotiations are stimulating new production structures in much of Asia, which consequently shift demand from agriculture into manufacturing and other urban land uses. At the same time, local governments are struggling with more financial autonomy and are becoming dependent on revenues from increased land values to subsidize the costs of development.
Three countries illustrate emerging land and tax policy issues raised by these complex interactions of international and local economies.
In Taiwan, land values for urban and agriculture uses are extremely divergent. The immediate issues are: 1) how to better use the 40,000 hectares of agricultural land that are no longer needed for production as a result of the GATT agreements; and 2) how to distribute the development benefits created by this conversion of agricultural land.
In Korea, the challenge concerns the legality of taxation to capture excessive increases in land value and gains from land speculation. Faced with builders’ pressure to develop greenbelts and open spaces in metropolitan areas and with local politicians’ concerns over fiscal autonomy, the central government is preparing a major tax reform to capture these increments in land value.
In Japan, land values have changed dramatically over the past ten years, but the reasons for these fluctuations are not always clear. Land speculation, unpredictable market forces and government regulation all play a part. Analysis of failed attempts to control land prices will be valuable in developing future policies.
Land Value and Speculation
The perception of land value in Taiwan, Korea, and Japan may not be significantly different from that in other capitalist countries. The problem is in the speculative value, also known as “unearned income” or the “unearned increment” in land value. This value can be so high that it distorts all the legal, administrative, political and social measures designed to manage the use of land. In Japan, for example, land value in major cities tripled from 1983 to 1989. In Korea, land value increased 13 times between 1975 and 1990, while the national income increased only 5 times in the same period. In Taiwan, the value of farm land increased 155 percent from 1986 to 1990, compared to the GDP’s 36 percent growth during the same period.
Policies intended to control land values during periods of high speculation are unlikely to succeed. During the boom times of the 1980s in all three Asian countries, special interest groups and politicians dependent on economic growth failed to anticipate any negative downturn effects. Land policies became disorganized, and conflicts arose among different government departments. For example, some local governments subsidized farmland owners who had already sold their land for conversion to urban uses and had benefited financially from this speculation. Financial institutions provided loans to corporations which depended on land speculation for their corporate earnings. The results were devastating: farmers who wished to farm could not afford to buy farm land; manufacturers could no longer compete when 60 percent of their investments were spent on land costs; and average citizens had an even more difficult time owning a house.
Reevaluating Land and Tax Policy
As land values have dropped in recent years, there is a new opportunity to revise land policies. Special interest groups and land value speculators have softened their opposition to government intervention on land markets. The GATT and WTO (World Trade Organization) negotiations are requiring countries to better coordinate their land policies and general economic policies in the interests of industrial readjustment. Future policies in Taiwan, Korea, and Japan will likely incorporate the following measures:
New regulations will be designed to convert some farmland and environmentally less-sensitive land for housing and mixed-use urban development. The goals are to continue sustainable development and to assist the conversion of the agricultural sector.
Tax reform and exaction-like laws will be introduced to capture the “unearned income” from land speculation. A capital gains tax, land value tax and land value increment tax will be the hallmarks of tax reform. Local government will be given more autonomy to require private developers to share benefits with the community.
Land use planning systems will be coordinated at all levels of government to manage growth. New land use controls will be designed to cope with new economic activities derived from the economic readjustments.
To help advance these land and tax policy reforms, the Lincoln Institute research staff is working with colleagues in each country. The Council of Agriculture in Taiwan, Republic of China, and the Institute are conducting a three-year joint study (1994-97) on land value capture and benefit distribution mechanisms. A team of researchers from the Lincoln Institute and the Korea Tax Institute is researching tax reform for the Korea Ministry of Finance during the 1995-1996 academic year. Both American and Japanese scholars are examining land values in Japan from a macroeconomic perspective.
Alven Lam in a Lincoln Institute fellow whose current research focuses on land value capture and property rights in Asia.
Additional information in the printed newletter.
Chart: Indices of Korea Land Values and Major Economic Indicators: 1980, 1985 and 1990. Land prices, housing prices, national income and wholesale prices are charted. Source: Office of National Statistics, Korea Statistical Yearbook, each year, and Kim, Dai-Young, “Choices for Future Land Policy,” in Land Policy Problems in East Asia, 1994.
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One of the major objectives of the Lincoln Institute is to enhance discussion and debate on issues of land and tax policy. We accomplish this objective in part by sponsoring courses that bring stakeholders together at Lincoln House or other classroom locations. We believe these programs that permit face-to-face interaction can play a major role in advancing the debate and encouraging participants to share their ideas directly. But, our outreach through classroom courses can reach only a limited number of participants each year.
To supplement these programs, the Institute has developed other mechanisms for expanding our outreach and disseminating knowledge of critical land and tax policy issues. I would like to highlight some of these efforts, starting with recognizing the enthusiastic response of the readers of this publication, Land Lines. The articles published in each quarterly issue reflect the Institute’s involvement in education and research activities around the world and offer insights into our work on a wide range of matters. From the introduction of new tools and partnerships to improve planning in the U.S., to the development of value capture mechanisms in Latin America or the design of land tax programs in China and other transitional economies, Land Lines is the Institute’s primary publication for telling our story.
Other products of our publications program contribute to informing the debate as well. We publish books and policy focus reports based on research supported by the Institute, often in the form of edited volumes of papers presented at seminars or conferences. Working papers completed by Institute faculty and researchers are posted on our Web site so the results can be circulated in the public domain as quickly as possible. Currently more than 700 working papers, research reports and newsletter articles are posted, and many of them are available in Spanish or Chinese as well as in English. Each month thousands of visitors from around the world download material from our site.
The Web site also features two forms of online education. Many of our past course materials are available as complete documents that can be downloaded, and the Institute offers dynamic Internet-based courses on Lincoln Education Online (LEO), including Planning Fundamentals and Introduction to New England Forests. They provide lessons, self-assessment quizzes and additional resources for planning commissioners, citizens and other users who need information on tools and techniques.
Another effort to broaden the discussion of land and tax policy issues is the documentary film and outreach project known as Making Sense of Place. The first film, Phoenix: The Urban Desert, has been broadcast on television and shown in many community meetings throughout Arizona, and we are developing a second film about land use, growth and property tax issues confronting Cleveland, Ohio.
All of these non-classroom activities illustrate our commitment to reach out to many different audiences, to provide information and expertise that can make discussions about land and tax policy more valuable, and to help effect better decision making.
