Like most places these days, the United Kingdom needs more housing. But that housing won’t come at nature’s expense—at least not in England, where since 2024, any new construction project must be accompanied by a 10 percent net gain in biodiversity, ideally on the same site.

Whether that entails restoring wetlands or reforesting farmland, the improvements are intended to leave the immediate natural environment better off than it was before the development. But where that proves impossible, the goal of a “net” gain allows developers to engage in off-site conservation efforts or, as a last resort, to purchase biodiversity credits to fund habitat restoration and preservation elsewhere.

Prioritizing biodiversity has direct benefits for humans and other species, from ensuring clean air to protecting habitats. It also helps build climate resilience, whether in the form of trees that provide shade in overheated urban areas or soil that absorbs and stores carbon. The question for many communities is how to pay for such nature-based solutions—and one answer lies in the value of the land itself.

Passed in 2021, England’s Biodiversity Net Gain (BNG) rule is a form of land value capture, a strategy that allows communities to recover and reinvest some of the increases in land value that arise from development due to public investment or government actions, such as zoning changes. Researchers at the University of Liverpool are looking at the connection between land value capture and climate adaptation, and investigating how the BNG rule is affecting local fiscal strategies.

UK municipalities already had a few value capture tools available to them, from locally negotiated planning obligations to the Community Infrastructure Levy. Such revenues can fund investments in education, transportation, parks, or other public goods, but “the majority of land value capture in England is used for affordable housing,” says Richard Dunning, professor of land economy and housing at the University of Liverpool.

That left Dunning and his colleague, fellow University of Liverpool professor Alex Lord, curious about the impacts of the Biodiversity Net Gain rule—both its measured contributions to biodiversity and its impact on other value capture programs. The UK’s other main value capture tools are mostly used at the local level on a case-by-case basis, Dunning says. As a national policy, BNG has essentially moved the environment to the front of the queue, ahead of other land value capture opportunities that fund, say, affordable housing.

“[If] the first thing a developer needs to do is to ensure that they leave the environment in measurably better condition than when they started, that is effectively the first request you have made of them,” Lord explains. Whether that could “crowd out other forms of investment” is one of the questions the professors aim to answer by focusing on three unique case studies with support from the Lincoln Institute of Land Policy.

“It could be the case that putting biodiversity first in the queue actually makes the development worth more, so that there’s actually more [value] available to go into some other things,” Lord explains. For instance, many studies of statistically identical houses with or without nearby trees have found a price inflation effect for the homes set on leafy streets, he says. “So it’s entirely conceivable that the value of the development as a whole is enhanced as a result of there being on-site biodiversity.”

One of the three case studies Lord and Dunning will examine is London Dock in Wapping, a mixed-use development creating more than 2,000 homes and 7.5 acres of public green space on a 15-acre brownfield site in Central London. The developer’s investor brochure appears to position the on-site nature enhancements not as a bureaucratic requirement, but as a premium selling point, calling attention to its living roofs and 171 trees planted, as well as to its targeted 437 percent increase in biodiversity.

The three case studies will span a range of contexts, from those high-value former industrial docks in Central London, to a college expansion project in the historic, premium-priced university town of Cambridge, to the adaptive repurposing of a disused glassworks in Birmingham. In addition to examining how promised biodiversity increases are measured and monitored, Lord and Dunning want to understand how developers are responding to BNG in different settings; for example, is there a greater incentive to pursue off-site biodiversity credits for projects in high-value locations, where any loss of livable square footage takes a bigger bite out of profits?

While England’s BNG program—which was introduced to Parliament through the 2021 Environment Act—has sparked interest around the world, “we’re only a couple of years into the policy, so the evidence base for it is limited at the moment,” Dunning says. “So that’s the kind of exemplary nature of the case study approach these are first snapshots of what’s going on.”

Lord and Dunning’s project was among eight chosen for support through a recent request for proposals studying the use of land value capture to support climate adaptation and disaster risk management. Such case studies can help practitioners and policymakers implement effective LVC tools to support climate adaptation and disaster risk reduction, ultimately resulting in more climate-resilient, fiscally healthy communities, says Patrick Welch, associate director of urban sustainability at the Lincoln Institute.

“Our research over the past few years has documented the real potential for land value capture to help fill the multi-trillion-dollar urban climate adaptation gap,” Welch says. “However, we lack well-documented examples of these instruments being used in practice, which are essential to improve our understanding of the full, practical potential for land value capture to advance climate goals and reduce the impacts of sea level rise, flooding, extreme heat, and other climate impacts.”

The seven other proposals selected for support will document case studies on four continents and span a range of climate risk adaptation strategies—from flood mitigation, to wildfire recovery and prevention, to issues of water scarcity and extreme heat. The research topics include:

• Bogotá, Colombia’s use of a betterment levy to finance an ecological cycling corridor along the Córdoba Canal. In the past, funds generated through this land value capture tool were mostly used to pay for road expansion and vehicular infrastructure, but in this case the levy helped support an intervention that integrates flood-risk mitigation, environmental restoration, and active mobility.
• A year after the Eaton Fire destroyed thousands of homes as well as critical water and utility infrastructure in Altadena, California, Los Angeles County is turning to a land-based financing instrument to help pay for disaster recovery, through the Altadena Wildfire Recovery Infrastructure Financing District.
• Planned relocation from at-risk coastal areas is a much-discussed but fraught climate adaptation strategy; Transfer of Development Rights (TDR) programs, implemented in a handful of coastal Florida counties, may offer a promising, market-based approach to the challenge. By allowing development rights to be shifted from vulnerable areas to safer locations, TDRs can reduce risk exposure while compensating landowners without relying entirely on public buyouts.
• As many places face increased water scarcity but lack the financing needed to adapt to such conditions, Luján de Cuyo, a fast-growing midsized city in Argentina’s semi-arid wine region, may offer lessons for similar communities. The municipality has assembled six coordinated land value capture tools—betterment contributions, differential rent charges, idle land surcharges, sale of building rights, strategic tax exemptions, and transfer of development rights—to generate dedicated revenue streams for water efficiency infrastructure, aquifer recharge protection, and compact development.
• After repeated stormwater disasters hit Foshan, China, in the 2010s, the Nanhai District developed the Climate-Linked Development Right Cycling (CDRC) This land-based financing tool designates formal flood retention zones, reallocates development rights from high-risk to low-risk areas, and captures land value increments generated through adjusted floor area ratios (FAR) in safer areas, which are earmarked exclusively for urban flood adaptation infrastructure.
• In Melbourne, Australia, some 1,200 acres of industrial land is being rezoned and transformed into a high-density, mixed-use development at Fishermans Bend—but the site is highly vulnerable to flooding, and the entire region is projected to face water security pressures. Since most of the land is privately owned, a Development Contributions Plan, required as a condition of planning approval, is financing climate resilience infrastructure, from flood mitigation and drainage upgrades to water management systems.
• The innovative, market-based Stormwater Retention Credit program in Washington, DC, which has been in operation for over a decade, requires developers to strictly manage density-related stormwater runoff, but allows them to satisfy some obligations by purchasing credits from unrelated Green Stormwater Infrastructure projects, channeling private capital into financing climate resilience across the city.

These selected case studies will be published on the Lincoln Institute website in 2027; in the meantime, learn more about land value capture and climate adaptation—and learn more about Lincoln Institute RFPs, fellowships, and research opportunities.

Jon Gorey is a staff writer at the Lincoln Institute of Land Policy.

Lead image: Redevelopment projects in South London’s Elephant & Castle neighborhood have added thousands of homes in tandem with new green spaces. Credit: Ogulcan Aksoy via Getty Images.