Applicability of land value capture mechanism for housing development in Bangladesh

Abstract

Land value capture (LVC) is a policy approach that enables communities to recover and reinvest land value increases that result from public investment and government actions. For the cities in developing countries, governance and institutional challenges exist to implement LVC. Bangladesh is not an exception in this regard. Due to the construction and operation of Purbachal Expressway in Dhaka, the adjacent land value has increased exponentially. The aim of the study is to explore the mechanism and practice of LVC and its applicability in Bangladesh as an innovative solution to housing development. To fulfill the aim the following objectives have been formulated: 1) To investigate the LVC mechanisms related to housing development as practiced in the world; 2) To explore the ongoing land valuation trend and practices in the adjacent areas along the Purbachal expressway, and 3) To propose the legal and planning framework for utilizing LVC mechanism for housing development in Bangladesh. The research is qualitative in nature and data have been collected from primary and secondary sources. This research required sampling of participants from landowners, middle man and real estate developers representatives from the study area for key informant interview (KII) and focus group discussion (FGD). For that purpose, purposive sampling was utilized. The study summarized the globally recognized development-based and tax-based mechanisms for capturing land value related to housing development. The study revealed that the cost of land, land price and land tax in the Purbachal region has increased substantially. The study finds a huge potential to use LVC as an effective policy approach in Bangladesh’s context. The 1953 Town Improvement Act stipulated by the Capital Development Authority (RAJUK) contains references to betterment fees that were never used in practical. The study proposes a legal and planning framework to frame a Land Value Capture Act. This research provides a roadmap for policymakers and urban planners to navigate LVC implementation and ensure sustainable housing development for the future of Bangladesh.