The role of negotiated developer obligations in financing large public infrastructure after the economic crisis in the Netherlands

Abstract

The economic crisis that started in 2009 has negatively impacted in the Netherlands the available financial resources for urban development. Dutch municipalities struggle since then with falling local financial sources, especially since active public land policy, traditionally an important additional financial source, became not so profitable anymore. One supposed effect is the limited degree to which municipalities can nowadays finance public infrastructure that serves wider areas, thus more than one specific development site (i.e. 'large' public infrastructure). Until now, however, there are no data available that support this claim. In this paper, we explore this and the role that developer obligations can play as an alternative, compensating financial source. Developer obligations are in many countries a growing popular public value capturing instrument, but in the Netherlands, a relative new phenomenon. On the basis of surveys, interviews and policy analysis, we conclude that at least a quarter of Dutch municipalities use developer obligations to obtain financial sources for large infrastructure. This seems, however, so far not to compensate for the diminishing of other municipal financial sources. The paper ends with some speculation about the future evolvement of developer obligations in the Netherlands. ARTICLE HISTORY

Divergence in planning for affordable housing: A comparative analysis of England and Portugal

“…Muñoz- Gielen et al (2018), who have compared the adoption of different governance approaches to land development over time in different countries (comparisons range from more active operations of land readjustment to more passive approaches of private land development), and relate the use of inclusionary housing tools to goals of public land value capture, distinguish between "direct" and "indirect" rationalities of public land value capture Direct approaches are based on the rationale that planning decisions generate windfall gains, and this increase belongs either partially or totally to the community. They claim that landowners have no moral right to the full increase of land value that arises from planning decisions, and therefore the community should capture it.…”

“…In terms of the contributions that this paper tries to make to the literature, it is relevant to emphasise that the paper does not aim to develop theory in the sub-field of land-use planning or development control (for more details see Oxley, 2004;Muñoz-Gielen, & Lenferink, 2018;Crook, & Whitehead, 2019). Rather the paper aims to contribute to the literatures that, from a cultural and historical perspective tries to explore the conditions that explain differences and similarities in planning policies, practices, and outcomes.…”

Policies for a more efficient and inclusive housing market in Luxembourg

“…However, the promoter is not responsible for building schools, nurseries or roads extending out of the area. To internalise the impact of developers' building plans on the communities, indirect value capture instruments, such as negotiated developer obligations, are used in many OECD countries, including the Netherlands, Spain, France, the U.S. and Canada (Muñoz Gielen and Lenferink, 2018). Negotiated developer obligations are flexible, only lightly regulated in national legislation and with detailed regulation usually provided at the municipal level.…”

Challenge of capturing socially generated land values: principle versus practicality

“…Munõz Gielen and Lenfrerink (2018) estimate that only one-quarter of municipalities employ developer contributions to pay for large-scale infrastructure, and even then these do not fully compensate for the loss of municipal finance. Legally, public value capture is limited to cost recovery but there is a widely held view that such policies have not been successful (Buitelaar and Bregman, 2016;Munõz Gielen and Lenferink, 2018).…”