Funding Infrastructure by Capturing Land Value Increments: An Idea Whose Time Has Come

Connecticut General Assembly

Office of Legislative Research

Stephanie A. D’Ambrose, Director

March 20, 2015

LAND VALUE CAPTURE (LVC) UNDER CONNECTICUT LAW

Connecticut law allows local government entities to use certain LVC methods to finance new infrastructure. These methods generate revenue by “capturing” the increase in the value of property located near the new infrastructure. Water pollution control authorities and special taxing districts often finance new infrastructure by levying “benefit assessments” on those properties that especially benefit from the infrastructure.

Comments:

 Capturing private land value increases that ensue from public actions to help pay for infrastructure… Yes, it’s being implemented – in Connecticut since 2015. London’s massive Crosstown underground rail line is capturing land value increases along the line to help pay capital costs. In Portland, Common Ground-ORWA is proposing land value capture by delineating “transit benefit districts” around new light rail stations where transit oriented development is planned. This method converts the added value generated by public transit investments into annual betterment fees that supplement revenue generated from traditional sources, such as fares and property taxes.