Value capture is a type of public financing that recovers some or all of the value that public infrastructure generates for private landowners.
Public investments, such as building transportation or sewer facilities, can increase adjacent land values, generating an unearned profit for private landowners. The unearned value (increases in land value which otherwise profit private landowners cost-free) may be "captured" directly by converting them into public revenue. Thus, value capture internalizes the positive externalities of public investments, allowing public agencies to tax the direct beneficiaries of their investments.
Value capture strategies can be applied to developers or landowners, and they can be applied before or after a public improvement is built. In the case of new public transit facilities, the property value premium nearby can be as high as 167%. Types of value capture include the following:
- Tax-increment financing (TIF)
- Special assessment districts or improvement districts
- Infrastructure impact fees (such as traffic or utility fees)
- Joint development
- Air rights
- Exactions, public easements, or other nonpossessory interests
Famous quotes containing the word capture:
“This is the hope of many adolescent girls—to capture a parent’s heart with love for them as they are, as people. They reject the notion of being loved just because they are the child of the parent. They want the parent to fall in love with them all over again, because being new, they deserve a new love.”
—Terri Apter (20th century)