The Mechanics of Land Value Appreciation, Evaluation, and Capture in Six Intermediate Cities of Colombia

This paper examines the application of Land Value Capture (LVC) mechanisms across six Colombian municipalities—Marinilla, Tocancipá, Armenia, Bello, Gachancipá, and Valledupar—to understand how local economic conditions, market strength, and institutional capacity shape the success and limitations of LVC as a sustainable urban finance tool. Through in-depth case studies and interviews with public officers, private sector experts, and academics, this study analyzes how municipalities adapt LVC strategies to their contexts and assesses the drivers behind successful implementation.

Public capacity and regulatory frameworks are highlighted, illustrating that municipalities with robust local governance and knowledge-transfer partnerships are better equipped to manage LVC and engage the community in transparent revenue allocation. A comparative approach to LVC implementation across these municipalities also reveals distinct approaches in terms of goals, implementation scale, governance structures, and revenue predictability, underscoring the central role of institutional capacity and land valuation processes in achieving stable and accountable LVC outcomes. Municipalities like Marinilla, Tocancipá and Armenia, which benefit from strong governance frameworks and internal valuation capabilities, demonstrate higher revenue stability and public support, whereas Bello, Gachancipá and Valledupar face challenges due to a reactive approach to urban policy and a reliance on valuation techniques conducted by external entities, leading to difficulties with enforcement and transparency.

Some municipalities have outsourced appraisal services to third-party companies to address immediate capacity gaps, while others rely on Colombia’s national cadastral authority (IGAC) to perform these services. Our findings reveal that sustained LVC performance depends less on which entities conduct land valuations and more on the accuracy, legitimacy, and alignment of those valuations with local priorities. Given the central role played by the IGAC, its institutional strengthening is critical for fostering efficiency, trust, and coordination between national and local levels. We argue for enhanced national-local collaboration, improved oversight of outsourced services, and a concerted investment in municipal capacity-building. A sustainable LVC framework in Colombia must be grounded in accurate and trusted valuation systems, but also in the ability of municipalities to align LVC tools with long-term development strategies that both reflect local needs and strengthen public legitimacy.