MAPC land pooling symposium presentation 5 11 2011

Land Pooling: A Possible Alternative to

Eminent Domain and Tool for

Equitable Urban Redevelopment

May 11, 2011, 9:00 am – 12:00 pm

About MAPC

The mission of the Metropolitan Area Planning Council

(MAPC) is to promote smart growth and regional

collaboration in Metropolitan Boston, through public policy

research and advocacy, technical assistance, mapping and

analysis, and regional planning. Our work is guided by our

regional plan, "MetroFuture: Making a Greater Boston

Region."

The MAPC planning area consists of 22 cities and 79 towns

that include coastal communities, older industrial centers,

rural towns and modern cities.

MetroFuture Regional Plan

About Lincoln Institute of

Land Policy

The Lincoln Institute of Land Policy is a leading

resource for key issues concerning the use,

regulation, and taxation of land. Providing high-

quality education and research, the Institute strives

to improve public dialogue and decisions about land

policy.

Agenda

• Welcome (10 minutes)

• Overview of Land Pooling (40-45 minutes)

• Land Pooling Process in a U.S. Context (40-45 minutes)

• Break (10 minutes)

• Land Pooling in Massachusetts: Discussion and Q & A

(40-50 minutes)

• Next Steps (10-15 minutes)

Why Land Pooling?

• Cities must transition in order to meet current

needs and future demands

• We need options that engage – not marginalize

– property owners

• We need solutions that create less opposition on

compensation and other matters important to

residents

Boston’s West End

1955 2005

Eminent Domain

• Top-down: government

driven

• cash based: property

owners paid out

• Judicial-administrative

Process

Land Pooling

• Bottom-up: stakeholder

driven

• Equity-based: property

owners contribute in

• Democratic-participatory

process

Land Pooling for Economic Development

Overview of Land Pooling

William A. Doebele

Author and Professor of Urban Planning and Design

Emeritus, Harvard University


Land pooling is a land assembly process that is

used for developing and redeveloping real estate.

Other names:

• Land Readjustment (South Korea and Japan)

• Land Consolidation (Europe)

• Land Pooling (Australia)

Google “Land Readjustment” for a literature review on the topic


Before After

(Source: Larsson, 1997)


Property owners work with local government or

developers to reconfigure parcels for more

optimal development and redevelopment in such

a way that increases total land value.

During an actual land pooling process, a number

of private parcels is temporarily put into

common ownership and later reallocated to a

new highest and best use.


Land pooling was

conceived in 1791

when George

Washington

(a former land

speculator) and his

associates used it to

finance and build

the new capital in

Washington, DC

Plan of the City of Washington," March 1792

(Source: Library of Congress)


1791 Land Pooling Process in Washington, DC:

• Farm owners transferred titles to Mr. Washington in trust

• Mr. Washington authorized a plan outlining street

layout, public sites, private urban lots, etc.

• Federal government paid landowners for sites of public

buildings

• Half of remaining lots were returned to original owners;

half were retained by the federal government


The legislative

origins of land

pooling was

established in 1902

by Franz Adickes,

mayor of Frankfurt-

am-Main, Germany

with the goal of

improving the

efficiency of

farmland.

(Frankfurt-am-Main, Wikimedia Commons)


Land pooling process for farmland in Germany:

• Farmers temporarily put land titles in a common pool

• Plan for more rational farmland boundaries was made

• Titles were assigned back to farmers according to the plan

Examples of Land Pooling

First major urban

uses of land

pooling: After the

1923 Great Kanto

earthquake (Toyko),

land pooling

allowed the city to

address a medieval

street pattern and

rebuild with

minimum use of

public funds. (Source: Yokohama Central Library)

Examples of Land Pooling

First major urban uses of land pooling (continued)

• Japan: Rebuilding of Nagoya, Osaka, Hiroshima and

Yokohama after World War II. It was also used for land

acquisition for ―Bullet Train‖ lines and stations.

• South Korea:

• 60% of the urban expansion of Seoul was

accomplished through land pooling (1984 data).

• 30% of the urban expansion of Daegu was

accomplished through land pooling.

• Today, 35% of the urban expansion in Korea (1990

data) is accomplished through land pooling.


Land Pooling has also been used in Bhutan, France,

Finland, Germany, India, Indonesia, Israel/Palestine,

Nepal, the Netherlands, Sweden, Taiwan, Thailand, and in

many other parts of the world.

Historically it is has been used as a means to:

• Capture land value increments to cover urban

development costs

• Adjust outmoded property boundaries


It has also been recognized as a tool to:

• Facilitate land acquisition for urban development –

speeding up the development process

• Allow existing landowners to share the wealth

generated from urban development

• Promote housing development

• Avoid gentrification

(Home, 2002 and Hong, 2010)

How Does Land Pooling Work?

Before After

(Jabatan Perancangan Bandar Dan Desa - Senanjung, Malaysia)


(Source: Hong, 2010)


1. Landowners volunteer to pool. Law provides: If a

super-majority agree, minority must participate.

2. Agreement on development plan

3. Every fourth lot designated as ―cost-equivalent‖ lot

4. As lots are sold, money from ―cost-equivalent lots‖ pay

off infrastructure costs.

5. If calculations are correct, land will be urbanized or

redeveloped at no public cost.

6. Remaining urban lots are returned to to original owners

of land, as close to original locations as possible.


Before After

(Source: City Planning Bureau of Nagoya, Japan, 1982)


Projects can be initiated by private owners or public agencies

LR Projects in Japan Initiated by Different Entities

(% of total land area: 1954-2000)

(Source: Kiaytaka, 2002)


Sample Calculation of Net Gains

Value of ten acres of undeveloped land $1,000,000

Total cost of planning, subdividing, servicing $600,000

Total value of urban lots created $3,000,000

Net gain in value $2,400,000

Sale of 25% of urban lots would pay cost of infrastructure

Elements Essential to

Successful Land Pooling

• Premise of a strong land market

• Land owners must believe final profits will be

greater and land is worth the negotiating time

• Reliable ownership records (cadastres)

• Trained and credible assessors

• Resolution of potential disputes through

agreement or addressed by enabling legislation

Before After

(Source: Kaohsiung Municipal Government, 1979)

Questions?

Land Pooling in a U.S. Context

James FreasRegional Planner, Metropolitan Area Planning Council

Yu-Hung HongSenior Fellow, Lincoln Institute of Land Policy and Assistant

Visiting Professor, Massachusetts Institute of Technology

Land Pooling in a U.S. Context

Case Study: Land Pooling in Hampton, VA

Goals:

1. Illustrate the various features of land pooling

2. Explore the applicability of the ideas in a U.S.

context

Background: Hampton, VA

Visual from Buckroe Master Plan (Source: City of Hampton, VA)



City Owned

Three

Cooperating

Landowners

Remaining

Property

Owners

Large Property

Owners


Public Park

Property Characteristics:

1. High differential increments in

land values before and after

land pooling project.

2. Government already owns

area in yellow

3. Major landowners in blue

agreed to sell land together.

4. Landownership (in blue,

orange and red) is fairly

concentrated. Two major

property owners own area in

red.

Enabling Conditions for LP in Hampton

Landowner Characteristics:

1. Affected landowners

have motivation to stay

in the neighborhood.

2. Planning for

redevelopment in the

neighborhood has been

participatory.


Technical, Legal, and Political Characteristics:

1. Technical skill is available for property assessments

before and after land pooling.

2. There was a precedent that treated parts of the area

as a unified unit for redevelopment.

3. The city is eager to revitalize the entire neighborhood.


Strengths

1. Developers with real estate development expertise

can be involved in the early stage of redevelopment.

2. Land Pooling that requires the approval of the

majority of landowners to execute land assembly is

more democratic than is eminent domain.

3. Land pooling can avoid the heavy up-front capital

requirement for property acquisitions by the local

government.

4. Land pooling may allow urban redevelopment to be

self-financing.

Reflection

Property Cost Property Cost

Development

Costs

Profits

Project Value

Land Pooling Development Financing

Challenges

1. There is no precedent of land pooling legislation.

2. Participation in planning and negotiation is time

consuming for property owners.

3. Public or private initiators of land pooling must have

good negotiation skills.

4. All participating parties—land owners, the city, and

developers—will have to share redevelopment risks.

5. Anticipated capital gains for participating

landowners will not be realized until they sell their

property.

Reflection

Reflection


Pooling Process for Hampton

1. Discussion with large property owners

2. Community meeting to discuss process

3. First participation vote – 50% threshold

4. Create entity to lead development

process

5. Engage development consultant team

6. Market Study, Financial Feasibility,

Initial Design work

7. Draft development pro-forma

8. Final participation Vote – 75%

9. Final development plan, contracts

signed, land titles pooled

10. After redevelopment, property owners

receive final compensation and Land

Pool entity dissolved

Pooling Process for Hampton

Break (10 minutes)

Next on the Agenda:

• Land Pooling in Massachusetts:

Discussion and Q & A (40-50 minutes)

• Next Steps (10-15 minutes)

Land Pooling Symposium

Land Pooling in Massachusetts:

Discussion and Q & A

Land Pooling Symposium

Next Steps

Resources

MAPC Land Pooling Toolkit

http://www.mapc.org/resources/lptoolkit

MAPC – James Freas et. al: [email protected]

Lincoln Institute – Yu-Hung Hong: [email protected]

http://www.mapc.org/resources/lptoolkit

mailto:[email protected]

mailto:[email protected]

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