Land Value Capture
Land value capture is a tool that recovers increased property values from public infrastructure to fund community projects.
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
- Development Charges
- Impact Fees
- Inclusionary Housing Policy
- Transit-Oriented Development
- Urban Planning
An overview of Hedge Road Landing. (Alliance Homes)
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
Highlights from the Delta Golf & Country Club listing brochure. (Colliers)