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Land Value Capture

Land value capture is a tool that recovers increased property values from public infrastructure to fund community projects.

Land Value Capture

September 30, 2025


What is Land Value Capture?

Land value capture is a public financing tool that recovers a portion of increased land values generated by infrastructure investments, such as new transit lines. Governments use it to fund public projects and affordable housing.

Why Land Value Capture Matters in Real Estate

It matters in real estate because infrastructure projects often raise nearby property values. Land value capture ensures public investment benefits are reinvested into communities rather than solely accruing to landowners.

Example of Land Value Capture in Action

A city imposes a levy on developers benefiting from a new subway extension to help fund affordable housing in the surrounding area.

Key Takeaways

  • Recovers land value gains from public infrastructure projects.
  • Funds public amenities and affordable housing.
  • Ensures benefits are shared with communities.
  • Prevents windfall profits for landowners alone.
  • Used in transit-oriented development financing.

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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