|  a  Access to Land in South Asia The World Bank Guidance Note © 2024 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Preface L and serves as the bedrock for all human endeavors. Our burgeoning needs and aspirations, coupled with the imperative to safeguard our planet, underscore the criticality of land in our collective narrative. As our global population swells, so does the demand for resources, urging us to push the boundaries of innovation and sustainability. However, our current land administration and management systems struggle to keep pace with these evolving demands, leaving a glaring gap between aspiration and implementation. Despite its undeniable significance, land often languishes on the periphery of public discourse and development priorities. It is time for this narrative to shift. This Guidance Note represents a call to action, dedicated to enhancing access to land and unlocking the full potential of land assets for urban and infrastructure development, as well as renewable energy investments. It not only underscores the importance of improving land access but also highlights the pathways towards leveraging land assets, creating value, and capturing its dividends. Drawing inspiration from South Asia’s rich legacy in land administration, we acknowledge both the strides made and the challenges that persist. Recent success stories include the Digital India Land Records Modernization Program, alongside parallel initiatives in Pakistan, Bangladesh, and Sri Lanka. Yet, formidable hurdles remain. Outdated land records, coupled with manual processes in planning, mapping, valuation, and taxation, impede the swift execution of development agendas. Litigation over ownership, succession, and compensation is widespread and further complicates matters, leading to systemic delays, setbacks, and cancellations in critical development initiatives across the region. Tailored primarily for stakeholders in urban development, housing, and renewable energy sectors, this guide serves as a technical manual for navigating the complex terrain of land access and utilization. However, its relevance extends far beyond, encompassing all endeavors aimed at climate action and sustainable land use. We trust that its insights and practical guidance will invigorate the discourse on land systems and services, igniting a renewed commitment to fostering equitable access to land and unlocking its latent development potential. The stakes are high. Effectively addressing land issues is not merely a matter of financing infrastructure or capturing value; it is a prerequisite for nations to honor their commitments under the Paris Agreement and forge a sustainable future, on a livable planter, for generations to come. Join us in this pivotal journey towards a world where land is not just a finite resource but a boundless platform of opportunity, equity, and resilience. Together, let us rewrite the narrative of land access and forge a path towards a more livable planet for all. Yours sincerely, Abedalrazq F. Khalil Practice Manager, Urban, Resilience and Land Global Practice, South Asia Region, The World Bank Preface  |  iii Acknowledgments T his Guidance Note was written by Mika-Petteri Törhönen and Richard Grover together with Sarah Antos, Aparna Das, Dinesh Mehta, Matt Nohn, Gerald Ollivier, Brian Roberts, Valerie-Joy Santos, Vasudha Thawakar, and Yan Zhang. The authors are grateful for Yuko Arai, Federico Barra, Tanuja Bhattacharjee, Navika Chaudhary, Surbhi Goyal, Parthapriya Ghosh, Dong Kyu Kwak, Venkata Rao, Mridula Singh, Jari Väyrynen, and Willem Van Der Muur for provided guidance and quality control during various stages of write up and iteration. The peer reviews by Md. Akhtaruzzaman, Klaus W. Deininger, Ludovic Delplanque, Ivonne Astrid Moreno Horta, Talal Anan Kanaan, Patrick Alexander Kirby, and Ming Zhang were invaluable in detailing the manuscript. The Guidance Note was approved for publication at the Decision Meeting chaired by Abedalrazq F. Khalil on October 30, 2023. The work was overseen by Regional Directors for Sustainable Development John Roome and Dina Umali Deininger, and Practice Managers Meskerem Brhane and Abedalrazq F. Khalil. The work was initiated by Illango Patchamuthu, Director of Strategy and Operations, and Andrea C. Guedes, Manager, and the World Bank’s Regional Management Team of South Asia region. The Guidance Note forms the main deliverable of the Access to Land for Public Asset Monetization, Transit Oriented Development and Renewable Energy Investments (P178387) knowledge work. The work has benefited greatly from the grant financing provided by the Public-Private Infrastructure Advisory Facility (PPIAF) for projects focusing on access to land in India, Pakistan, and Bangladesh. Acknowledgments  |  v Table of Contents Prefaceiii Acknowledgmentsv Executive Summary ix 1. Introduction 1 1.1 The Land Problem 3 1.2 The Project 5 1.3 Structure of the Guidance Note 6 2. Land Administration and Management in SAR 9 2.1 The Need for Effective and Reliable Land Administration 11 2.2 Land Records and Maps in South Asia 16 2.3 Registration of Transactions and Rights 17 2.4 Revenue and Transaction Records 19 2.5 Maps, Property Valuation, and Transaction Taxes 22 2.6 Land Litigation 25 2.7 Tenure Insecurity and Informality  29 2.8 Conclusion 32 3. Land Assembly 35 3.1 Introduction 37 3.2 The Problem of Land Assembly 38 3.3 Methods of Acquiring Land for Site Assembly 39 3.4 Systematic Parcel by Parcel Registration of Rights for Land Assembly 44 3.5 The Contrast Between Public and Private Sector Site Assembly 44 3.6 Conclusion 44 4. Improving Access to Public Lands 47 4.1 Rationale for Improving Access to Public Lands 49 4.2 Functions of Public Lands and Building Assets 50 4.3 The Cornerstones of Good Public Land and Building Asset Management 51 4.4 Public Land Management Institutions 56 4.5 Leveraging the Value of Public Land 55 4.6 Conclusion 58 5. Compulsory Acquisition 61 5.1 Defining Compulsory Acquisition 63 5.2 Justification for Compulsory Acquisition 65 5.3 Key Requirements for Compulsory Acquisition 65 5.4 The Problems of Establishing Title and Rights 66 5.5 Assessment of Compensation 69 5.6 Conclusion 73 Table of Contents  |  vii 6. Value Capture 75 6.1 The Idea and Theory of Value Capture 77 6.2 Value Capture Tools 79 6.3 Prerequisites for the Use of Value Capture Instruments 90 6.4 Conclusion 92 7. Access to Land in Transit-Oriented Development 93 7.1 Introduction 95 7.2 TOD and Types of Projects  96 7.3 Main Types of TOD Projects 97 7.4 Description of the Types of TOD Projects 97 7.5 Factors Driving the Trend Toward TOD 98 7.6 The Rationale for Supporting TOD Projects 98 7.7 TOD Supportive Principles 100 7.8 Factors Affecting Access to Land 100 7.9 Physical Access to Land 103 7.10 Land-use Planning and Development 103 7.11 Land Acquisition 104 7.12 Governance: A Core Problem Affecting Implementation of TOD 104 7.13 Multiple Agencies Responsibility for Land Associated with TOD 105 7.14 Framework for Analyzing TOD Land-governance Functions and Responsibilities 106 7.15 Added Complexity of Gaining Access and Assembly of Land for TOD Projects 107 7.16 Land Administration and Management Requirements for Access to Land for TOD 108 7.17 TOD Project Access to Land Checkpoints and Triggers 112 7.18 Value-adding Access to Land Access Initiatives for TOD Projects  114 7.19 TOD Land Banks 116 7.20 Conclusion 116 8. Access to Land for Renewable Energy Investments 119 8.1 Background 121 8.2 Developing RE in Land-scarce Regions 126 8.3 Lessons on Land Assembly and Management for RE 128 8.4 A Decision-making Framework for the Future 129 8.5 Conclusions 131 9. Improving Access to Adequate Land for Affordable Housing 135 9.1 Introduction: Urban Land and Housing Markets in SAR - Messy and Bifurcated 137 9.2 Framework for Expanding Land Supply for Affordable Housing 139 9.3 Cross-cutting Measures: Planning, Regulating, and Financing 139 9.4 Leveraging Fiscal Policies for Equitable and Efficient Access to Adequate Land for Housing 147 9.5 Realizing Adequate Land Supply for Affordable Housing 147 9.6 Conclusion 152 10. Conclusions 153 viii  |  Access to Land in South Asia: The World Bank Guidance Note Executive Summary Executive Summary S ecuring access to land is a key factor in any infrastructure project. It determines whether developments designed to preserve nature or build The fundamental challenge in South Asia is that land records are commonly incomplete and out of date. There are significant areas, even in major urban sustainable cities and improve citizens’ quality of centers, without comprehensive or up-to-date records life can move forward, and impacts the size, cost, on how land is being used and who holds rights over and schedule of these projects, and whether they it. Beyond the issue of land records, inclusive access to can be completed at all. When systems to secure land also requires functional infrastructure and services access to land function effectively, governments for land management: South Asian countries require are empowered to invest in urban development, improvements in services governing development renewable energy (RE) production, mass transit planning and control, property valuation, land value systems, and affordable housing, and other forma of capture and taxation, and land acquisition. infrastructure investment. They are also more likely The objective of this report and the surrounding initiative to find that these projects do not overburden public is to improve land access in World Bank-supported budgets, as land assets can go a long way toward urban development, public land management, transit- securing and paying for investments. oriented development, affordable housing, RE, and But in South Asia, access to land is more commonly an infrastructure investments in the South Asia region. obstacle rather than an opportunity for infrastructure The land administration system should be capable investments. A recent review of World Bank Group of providing accurate information on titles and land (WBG)-supported investments in transmission lines, rights for the lands needed for these projects. solar parks, hydroelectric power projects, road and The World Bank Group can play a leading role in railway corridors, and urban transformation identified assisting the South Asia region remedy this situation. inability to access land as a major reason that projects The many regional programs to digitize and expand are canceled or delayed. These challenges are expected the coverage of land records should be prioritized to become more acute in coming years due to the high and supported, as well as held to tight performance demand for land created by rapid urbanization, the vast standards and completion deadlines. Long-term areas of land needed for climate change mitigation, success will require holistic improvements in land and losses of land from floods, inundation, droughts, administration systems, as well as the creation of and disasters. appropriate regulations, obligations, and incentives for keeping land records current to ensure that these In this report, access to land refers to the entire process improvements are sustainable. of securing areas or corridors of land for development. These processes include identifying, valuing, There are a number of ways in which sites can be assembling and acquiring sites, planning, permitting, assembled for development purposes. Whatever and monitoring land to host an investment. method is used, it is absolutely vital to be able to identify Executive Summary  |  xi who the owners of the land are and any other property urban, or demographic growth – are often regarded rights over it, such as occupancy, tenancy, residence, as being legitimate for land value capture, as it was and use rights. If land records cannot be relied upon, created by society at large rather than as the result of then the systematic registration of land and property individual entrepreneurship and investment. A wide rights in the area may have to be incorporated into the variety of devices can be used to capture this increase project before construction work can commence. in value, including property taxation, fees and charges, sales of development rights, sales of leases and land, Infrastructure investments often have to resort to and planning and development obligations. Value compulsory acquisition in order to prevent a situation capture depends upon the government having the in which a small number of owners can block a project capacity to precisely determine the value uplift that is by refusing to sell. This process can take a long time likely to result from an infrastructure investment. and be frustrated by title disputes or litigation about compensation values. For this reason, governments The difficulty of gaining access to land and applying require accurate and reliable land records to identify principles such as land value capture means that SAR individuals or groups who possess property rights that countries are missing out on significant development must be acquired and the assets taken and livelihoods opportunities. Transit-Oriented Development (TODs) diminished. They also need effective land valuation create opportunities for investment and added value infrastructure and the transparency of property markets along transit corridors but have been plagued in to determine fair and equitable compensation levels. this region by issues regarding land ownership, site definition, and compensation for the acquisition of SAR countries systematically underutilize public the parcels of land needed for construction. Land lands and buildings, despite these representing some issues related to TOD are more complex than for single of their most valuable assets. Investing in better entity or site projects as they affect hundreds of small access to state and public lands for development properties that have to be purchased or acquired – and improved management of these has enormous and unless all the land required for the entire corridor potential for providing an impetus for accelerated is secured, the project is likely to fail. SAR countries growth, diversification of the economy, and increased should adopt modern systems designed to ensure public revenues. This in turn promises to have a major the success of TODs, including the establishment of positive impact on these governments’ programs transit development authorities, integrated planning on sustainable urbanization, improvements in living and development approval systems, co-location of space, and poverty reduction. In order to unlock these services, pooling land resources and funding, and benefits, governments must develop accurate and bundled project finance. up-to-date records of public assets, as well as their values and uses, and establish an overarching rationale SAR countries also need effective land systems to for the ownership and management of public lands successfully mitigate the effects of climate change. The and buildings and invest in enhancing management land use change actions that governments committed capacity. to at the Conference of the Parties 26th meeting (COP26) will require vast tracts of land even as other SAR countries should also look into innovative methods large swathes of land will be rendered unsuitable for for funding development projects. Value capture can cultivation or habitation due to climate change. South play an important role by obliging those who benefit Asian countries’ transition away from coal and towards from infrastructure improvements to contribute RE production requires massive land acquisition and part of their gains in asset values to financing these land use repurposing. However, solar park projects in investments. The increase in value that results from the region have already been hampered by problems these improvements – often in the form of economic, related to land acquisition. Similar problems are xii  |  Access to Land in South Asia: The World Bank Guidance Note encountered with investments in other carbon neutral housing can be provided in different ways, including sources of energy. If these countries’ RE plans are the conversion of agricultural land through greenfield to achieve their full potential, comprehensive land development, upgrading informal settlements, and information, valuation, and administration are vital. densification of brownfield districts. It is critical to Governments should also adopt an approach that pairs provide an enabling environment to promote diverse geospatial analysis with field analysis prior to project land and housing supply to meet the evolving demands implementation to provide task teams with powerful of residents of every rung of the income ladder. decision-making information. Historically, South Asia has played a leadership role in land recording. However, recent decades Access to land for affordable housing is a common have seen the region fall behind global trends and challenge in SAR. In search of affordable housing developments from the poor state of land records and in urban areas, people and developers often turn public land inventories, informality, land disputes, outside of the formal housing supply chain because of weak land valuation infrastructure, and limited use problems such as the difficulties in obtaining land with of instruments to capture value are now holding back clear titles, a lack of up-to-date structure plans to guide investments in essential infrastructure development. development, overly rigorous zoning and development The result is a lack of affordable housing projects, control regulations, delays in gaining development canceled and delayed investments in RE, and derailed permits, and lack of infrastructure. Land for affordable investments in mass transit systems. The situation Bangladesh’ sunny delta and coast lands are competed for food, shelter and energy uses among others. Mika Törhönen Executive Summary  |  xiii is not acceptable, and promises to severely impact integrated land records with high reliability and low infrastructure development, food production, dispute rates, leverage asset values for investments environmental conservation, economic growth, and and revenue, and plan and implement projects to social and political stability. develop sustainable, prosperous cities – while at the same time preserving the environment for future It is time for South Asia to reclaim its role as a global generations. These investments in the use of land leader in land administration. The region must cannot be delayed. push forward with projects to achieve digital and xiv  |  Access to Land in South Asia: The World Bank Guidance Note 1 Introduction 1. Introduction 1.1 The Land Problem incomplete state because the land needed for them is unobtainable. I n 2021, the World Bank’s South Asia Region Working Group on Land suggested the need for a guidance note to promote holistic approaches for securing access In South Asia, claims to land are often contested or overlapping, with legal registration commonly to land. The Working Group reviewed multiple WBG- missing or out of date due to unclear, unfeasible, or supported investments in transmission lines, solar unaffordable processes. This increases the costs of parks, hydroelectric power, and mass transit, road and due diligence ahead of investments taking place and railway corridors, as well as urban and environmental the thoroughness with which it must be undertaken. investments and identified a pattern of delays or loan Land issues constitute the principal reason why many cancellations due to governments’ inability to access investment projects fail: No matter how good the design land. The World Bank also found in a parallel review of is or how skilled the implementation team, without experiences with land acquisition in Bangladesh1 that access to all the land needed to realise the plans and development projects there were commonly delayed at the time when it is needed, a project is, at best, due to land acquisition challenges, such as identifying doomed to underperform and there is an enhanced risk the owners of the target land areas. that it will fail entirely. Site assembly for a wide range of investment projects in Land needed for infrastructure investments can be the South Asia Region is extremely challenging. Major accessed in different ways. It could be purchased infrastructure investments typically involve either the from current owners, including through compulsory assembly of a network, for instance a road, railway, or acquisition. It could be leased or the right to use power line, or a large contiguous site, for instance a it gained through easements. It could be acquired transport interchange, railway station, or solar farm. A through donation, or sites brought together through network cannot be built if there are breaks in the line land pooling, or it may already be in the ownership of because land cannot be acquired. Large contiguous a public body. Whatever means are used to assemble sites cannot have areas in the middle of them in other the site, it is important to remove all encumbrances ownership together with access corridors to these. that could prevent the investment from moving forward These investments require either the whole sites to be and to do so in ways that ensure that those who own acquired or the investments not to go ahead. Certainty such rights are fairly compensated. Encumbrances that the land can be acquired is essential before any include tenancies, use rights, easements, access construction work can be started, otherwise there rights, customary rights, seasonal rights, indigenous is the risk that they may have to be abandoned in an and tribal rights, and rights which have been gained 1 The World Bank. (2022). Bangladesh: Land Acquisition Diagnostic Review, through long and peaceful enjoyment. In countries The World Bank, Washington, DC. Retrieved from https://documents1. that have not completed systematic land and property worldbank.org/curated/en/099359509012228968/pdf/ IDU05ea6dbd70b70e04c7f0b5ef06fbc25ad4670.pdf rights registration and kept its records up to date, 1. Introduction  |  3 An informal settlement in Pokhara, Nepal. Mika Törhönen determining who claims what rights and the legitimacy property rights so that they can be legitimately acquired and value of these claims is a major challenge and may and those surrendering them properly compensated have to form a key aspect of the investment. is a precondition for any successful infrastructure project. In contexts where property rights are insecure, A number of World Bank studies have concluded that governments will often find that they struggle to secure insecure property rights have an adverse impact on land for investments – and consequently, that their investment. This research has typically focused on efforts to tackle poverty and environmental issues are individual private investment, however, overlooking frustrated. the impact of insecure property rights on collective public investment. Democratic governments bound These challenges are expected to accelerate. Vast by the rule of law cannot simply seize or expropriate tracts of land are needed for climate mitigation the land needed for infrastructure investments. They investments such as afforestation, carbon neutral and must acquire it using legitimate legal processes and RE projects, and low carbon urban development to fully compensate in a timely manner those whose land, which governments committed at COP26. At the same property rights, and livelihoods they dispossess or time, land stocks will diminish as areas face unwanted diminish in value. For this reason, sorting out land and land use conversion due to informal migration or 4  |  Access to Land in South Asia: The World Bank Guidance Note become unsustainable for cultivation or habitation Informal settlements are very common, locking land because of temperature increases, changing weather users and dwellers out of formal economic structures. patterns, drought, desertification, sea level rise, floods, For instance, 20 percent of Dhaka’s population lives in and the increased frequency of climate-induced natural informal settlements, Karachi’s informal settlements disasters. These conditions, combined with rapid trends make up 8 per cent of the city’s area and fulfill over in urbanization, promise to result in an unprecedented 50 per cent of its housing needs, and 20 to 25 per demand for land, placing long-term stress on private, cent of the urban properties in Pakistan’s Punjab public, communal, and indigenous peoples’ land rights. province are not registered. Informality is associated South Asian countries face a common pattern of with poverty, poor health outcomes, and insecurity. difficulties in producing adequate administrative and Furthermore, informal settlements are often located governance responses on land issues. While there in hazard-prone areas or encroach on foreshores or have been recent success stories in digitalization forest lands. and modernization of land records and services2, Informal occupiers cannot simply be driven from services, there are significant areas and even urban their homes and businesses in order to make way centers - without comprehensive or up-to-date records for infrastructure investments. Legitimate rights of land and land rights. Apart from tenure security, which are unrecorded are still rights that should be inclusive land development also requires functional respected as called for in the Voluntary Guidelines infrastructure and services for land management. Land on Responsible Governance of Tenure (https://www. records provide the base, but improvements in planning, property valuation and taxation, and land acquisition fao.org/3/i2801e/i2801e.pdf ). Governments cannot are also needed. Yet capacity is often lacking. focus just on compensating legal owners when land is acquired for investments and ignore the impact on Informality is a major challenge. Tenancy without legal those with occupancy, residence, or use rights and protection, unauthorized settlements, unrecorded the loss of assets and livelihoods that would result. At historic land usages and gender equality vulnerabilities the same time, informality makes even diligent efforts are commonplace across the region, making it difficult to determine who is affected by such investments to identify the individuals affected by infrastructure challenging. This in turn negatively impacts local investments. services and governance and revenue flows. Up- Informality adversely impacts planning, infrastructure to- date records of lands, rights, asset values, and investments, and urban development by making such ownership would allow proper land use planning projects difficult to implement by causing problems in and development, and provide governments with the identifying who will need to give up property rights to opportunity to promote compact, green, low carbon enable investments to go ahead and what those rights cities, and capture land value increases resulting from are. Land litigation is widespread, and disputes over urban growth and infrastructure investment. land take long periods to resolve. In Bangladesh, for example, an estimated 80 per cent of civil and criminal 1.2 The Project court cases in the country involve land disputes. The situation is similar across much of the region in large This document provides guidance on access to land for part due to the lack of accurate and up-to-date legal infrastructure investments for World Bank teams and land records. their counterparts in governments as well as aiding policy makers in creating effective environments in which 2 The State of Karnataka in India is known, among other things, for its infrastructure investments can proceed with minimal success in digitizing its land records and land administration services delays and risk of being derailed. It was prepared as and improving public access to those services. See for example: https://www.elections.in/blog/bhoomi-karnataka/. part of for the Access to Land in SAR programmatic 1. Introduction  |  5 Land registration monitoring in Punjab, Pakistan. Mika Törhönen knowledge and advisory project3. Its objective is to and policy makers in them will benefit from the analysis improve land access in World Bank-supported urban it contains. There is a need to develop solutions that development, public land management, transit-oriented enable the unlocking of access to land at a time when development, affordable housing, and RE investments pledged climate change investments will require in the South Asia region. The note was initially drafted unprecedented amounts of land and as the need for in a Writeshop in Singapore on May 16–19, 2022, and investment in resilient urbanization and affordable subsequently iteratively consolidated and subjected to housing to new urban dwellers becomes more acute. internal and external peer reviews and field testing. The Guidance Note will help WBG task teams and Although the Guidance Note is primarily aimed at WBG their counterparts amongst borrowers manage these teams supporting operations that need to acquire land challenges more effectively as well as identifying issues to fulfil the investment objectives and WBG clients who for policy markers. The note reflects international best have or plan to borrow funds for such projects, central practices as well as the region’s rich cultural heritage, regional, and local governments and municipalities in tradition, knowledge, and successes. SAR have common weaknesses in landholding policies, land records, public land and building inventories, 1.3 Structure of the Guidance Note public land management, and public land monetization Chapter 2 examines the state of land administration 3 Access to Land for Public Asset Monetization, Transit Oriented Development and RE Investments (P178387). in SAR and the problems that this presents for land 6  |  Access to Land in South Asia: The World Bank Guidance Note assembly. Chapter 3 discusses the underlying theme and property rights from private owners, users, and of assembling land for infrastructure investments and occupiers, and how this tool can be used effectively to the principal ways in which this can be achieved. The assemble sites for investment in a fair and equitable next three chapters examine in greater detail three manner. Chapter 6 discusses how governments can ways in which land for infrastructure investments capture part of the increase in land value resulting can be assembled by governments borrowing World from development to fund infrastructure investment Bank funds for infrastructure investments. Chapter 4 and require or incentivize developers to contribute to examines effective ways to manage public lands, the the provision of infrastructure. Chapter 7 focuses on largest untapped resource available in the SAR region, the role of land access and leveraging TOD. Chapters 8 and examines how surplus, under-utilised, and non-core and 9 concentrate on questions surrounding how to land can be released for more productive investments. access land for RE and affordable housing investments Chapter 5 focuses on compulsory acquisition of land in an effective and timely manner. 1. Introduction  |  7 2 Land Administration and Management in SAR 2. Land Administration and Management in SAR 2.1 The Need for Effective and disability, religious affiliation, primary language, sexual orientation, political affiliation, or age. Common Reliable Land Administration challenges that prevent effective land administration L and administration is the process of determining, include legal and institutional complexities and the recording, and disseminating information about cost of establishing comprehensive land records and how the rules of land tenure, value, and use are applied maps, as well as the challenge of maintaining records and made operational4. It is important because land and that reflect the current reality on the ground. buildings typically account for between half and three There are a range of successful land administration quarters of a country’s national wealth. By providing systems, including setups based around registration of geo-references of buildings and land parcels, land deeds or title registries and cadastre or parcel-based administration enables the locations of people, assets, businesses, public services, and economic activities systems. But while the systems themselves vary, their to be identified, secured and insured. Good quality outcomes are similar – namely, comprehensive and land administration and policies are fundamental for reliable land records and maps. Digital records, online the management of resource and are necessary for access, common data standards and geospatial base, economic growth, environmental protection, social and data sharing, integration, and interoperability are cohesion, social stability, poverty reduction, and tenure the keys to developing an efficient and transparent security. Without it, potentially dangerous and socially land administration system. and environmentally damaging developments cannot The comprehensiveness of any land administration be controlled. system is essential. The utility of even the most Effective land management requires comprehensive reliable and transparent system is limited if it only and reliable records and geospatial data on land and covers part of a country and leaves areas, groups of the rights, responsibilities, and restrictions related to people, or economic activities subject to the vagaries land, as well physical extents, boundaries, fixtures, of informality. value, and uses. In much of South Asia this is not the Any claim to land and property rights ultimately can be case. Successful land administration systems provide protection of property rights for each property owner, traced back to an original grant, or the taking possession lessor, and user regardless of their ethnicity, gender, of unclaimed land followed by a lengthy period of peaceful, unchallenged enjoyment of the territory. Current claims to rights depend upon an unbroken chain 4 FAO. (2002). Land tenure and rural development, Land Tenure Studies No 3, 2002, Food and Agriculture Organization of the United of transfers back to those original events. A break in the Nations, Rome. Retrieved from https://www.fao.org/3/Y4307E/ y4307e05.htm#bm05.2; United Nations Economic Commission chain of transfer or an illegitimate transfer undermines for Europe (UNECE). (1996). Land Administration Guidelines: the legitimacy and enforceability of rights. These With Special Reference to Countries in Transition, United Nations, New York, and Geneva. Retrieved from https://digitallibrary.un.org/ can occur during any transfer and only come to light record/216105?ln=en; Williamson, I., Enemark, S., Wallace, J., and retrospectively; the owner of rights can be said to be the Rajabifard, A. (2010). Land Administration Systems for Sustainable Development, ESRI Academic Press, Redlands, California. person who, for the time being, has the best claim. 2. Land Administration and Management in SAR  |  11 Governments have sought to minimize this uncertainty of ownership being through the entry in the register. In over property rights through establishing land registers contrast, South Asian countries often rely on person- and cadasters as the definitive source upon which all based land records7 and a deeds system, where title is parties can rely. They have done this in order to minimize proved through documentation showing an unbroken the costs of due diligence on the part of potential series of transfers back to an original grant or taking purchasers and on financial institutions seeking to take possession of a property. property rights as collateral for a loan. Such registers A deeds registry does not provide a guarantee of provide certainty to property owners, would-be buyers, title, but it is a repository of deeds which document financiers, and investors alike. In contexts of uncertain that a person has acquired the property in question. property rights, the resources used in due diligence Modernized deeds are linked to cadastres and land can be regarded as a deadweight loss, as uncertainty parcels, and typically, registration in them sets a creates risks and discourages investment. The security precedent over competing claims on land. Plans or of property rights is therefore a hybrid good, providing maps can form part of a modernized deeds registry, private benefits but also a public good that benefits but often no spatial data is included. And when there society as a whole. is a spatial element in the deeds, it can be a textual If an efficient land registration system is in place, then description rather than a map or plan and is often legally enforceable rights, restrictions, and obligations inaccurate, causing potential for overlapping claims are recorded in the register rather than having to and lack of clarity. be proved through an unbroken chain of title. First Title registers are advantageous because they can registration reflects the results of unbroken chains of provide a guarantee of absolute ownership, as only title when the register was compiled, with subsequent entry in the register proves legal ownership. Any transfers being recorded so that the register shows the uncertainties in land registration disappear when current ownership. As part of first registration, disputed comprehensive cadastre and parcel mapping is linked and overlapping claims must be resolved. A cadastre to the land register, and trading, no matter whether records the boundaries of the parcels over which through a titles or deeds registry, occurs with uniquely rights, obligations, and restrictions apply. When there defined land parcels and properties, and registered is a reliable land register, those seeking to undertake owners. However, attempts to introduce conclusive title investment projects can identify all those with property systems in the region have been unsuccessful, at least rights over the potentially impacted land and anyone who in part because of widespread informality and elasticity possesses property rights over neighboring properties in land use. that may be adversely affected by it. As a result, it should be possible to identify all those adversely affected by a Land parcel mapping does not necessarily need to project who are entitled to compensation. be of the highest accuracy and thus expensive. The United Kingdom is famous for its general boundaries Modern land registries5 are parcel-based and concept and approximate land registry maps, which interlinked with cadastral records and maps. Each nevertheless enable lands and properties to be parcel has a unique identifier, and its boundaries are uniquely defined. Unified parcel-based land records 8 registered in the cadastre or land records 6, with proof provide the greatest certainty of title as long as they 5 Such as the Torrens land registration system, which developed in South are properly maintained through the recording of all Australia in the 1850s. transfers and changes to properties. 6 FAO. (2017). Creating a system to record tenure rights and first registration, Food and Agriculture Organization of the United Nations, Rome defines registry as an organization that records land rights and 7 Such as the Khatian system of Bangladesh and West Bengal. operates a land recording system. A parcel is a delineated area where 8 FAO. (2017). Creating a system to record tenure rights and first the rights on land apply. Retrieved from https://www.fao.org/3/ registration, Food and Agriculture Organization of the United Nations, i7559en/i7559en.pdf Rome. Retrieved from https://www.fao.org/3/i7559en/i7559en.pdf 12  |  Access to Land in South Asia: The World Bank Guidance Note There is little de facto difference whether the land being in the ownership of both spouses. Communities records or cadastre and associated maps support holding lands based on custom do not have registered evidentiary or conclusive (title) systems or whether rights over land. they are constitutive or declaratory operationally (as defined by FAO 2017, p. 48). The true difference lies For these reasons, it is important not to rely only on in the systems’ capability to stay current and reflect formal land records when defining project stakeholders the actual situation on the ground, and how societies and beneficiaries. Field verification and community perceive the reliability and utility of registration. consultations should form an important part of clarifying land tenure and use in South Asia. Ideally, No land registry is ever likely to be fully comprehensive before a large infrastructure investment commences, in its coverage of property rights. The statutes that land records should be systematically updated to established them define which rights can be recorded in identify individuals whose property rights, including them and which must be registered and, by implication, use and access rights, assets, or livelihoods will be which will not be. Usually, rights must meet certain affected. requirements before they can be registered - for instance, registered leases may have to be of a certain A land register is only as good as the quality of the minimum duration. Rules also determine who can be data it contains. It reflects the systems and processes identified as holding ownership rights: Minors may that underpin it. In reality, not all land registers provide not be permitted to be registered as owners in their accurate or reliable data about property rights, resulting own right, for instance, and social conventions may in a gap between what is recorded and reality on the determine whether women can be recorded as owners ground. A common reason for this discrepancy is the or whether jointly owned property can be recorded as lack of effective mechanisms for tracking and recording Why a land register may not be reliable or accurate yy The register has not been maintained and so has not captured transfers through sales, gifts, or sub-divisions. yy The method of registration used to compile the register is sporadic, requiring a trigger event for registration. The register may not cover properties that have not been subject to trigger events. yy The cost of registration and/or property transfer taxes discourage owners from registering transfers, resulting in informal and unrecorded transfers. yy Owners do not participate in the registration process out of fear that it will be used as the basis of taxation, or simply because they do not perceive a value in the process. yy A policy of systematic registration was adopted but not completed, so that there are areas for which property rights are not recorded or the records are incomplete. yy Records have been lost, destroyed, tampered with, or damaged. yy Data recording is not standardized, making the accurate identification of owners and properties difficult. yy The register does not comprehensively include all property rights but is selective in the rights it records. yy Certain rights, such as access rights and easements, are recorded against the property to which they apply but not against the property capable of enforcing them. yy Fraudulent claims to property rights have been registered. yy The register has not kept pace with urban development and omits informal developments. yy Parcel boundaries were not accurately surveyed. yy There are overlapping or disputed claims that have not been resolved. 2. Land Administration and Management in SAR  |  13 changes in ownership and use. Land registration can register, those undertaking infrastructure investments be slow, expensive, and cumbersome in the region, and have little alternative but to carry out a systematic its benefits are not always known or appreciated by all survey to establish the ownership of property rights land users. in the affected area and the identity of individuals who may be impacted by planned development. Since The costs in time and resources of maintaining an contested and overlapping claims are likely to exist and accurate land register, however, pale in comparison to the time taken to resolve them can be significant, this the costs of failing to do so. In the absence of such a may result in severe delays to infrastructure projects. Revenue record archives in Punjab, Pakistan. Dong Kyu Kwak 14  |  Access to Land in South Asia: The World Bank Guidance Note Land Records in Kerala, India A case of fragmented records In Kerala, land record keeping is fragmented. While progress has been made in connecting different sets of records, their data on land ownership commonly differs. Registration of Deeds is kept by the Department of Registration, Record of Rights by the Revenue Department, and the Field Book (cadastral map) by the Survey and Land Records Department. The cadastral map is grossly outdated, requiring a resurvey in 46 per cent of Kerala’s close to 1,700 villages. Land rights-related litigation dominates courts in Kerala, stemming in part from the system that allows registration of deeds without verifying the property details or the existence of previous deeds on the same land parcel. The situation is further complicated by the fact that a large percentage of land transactions between 1947 and 1967 were not registered. Informal settlements have made significant encroachments on vast state land areas. The Department of Survey and Land Records maintains a Field Book, which consists of individual survey plans of each land parcel. These plans are linked to the Record of Rights through map sheet and parcel numbering. In the case of subdivision, after registering a transaction in the Register of Deeds, the new owner applies for a mutation to subdivide the old parcel into two or more parcels, and to survey them for the Field Book and update the cadastral map. However, owners often do not proceed with the mutation request and the Field Book, and thus the cadastral map, does not get updated. Large numbers of mutations are pending, which undermines the value of the Field Books. As a result, the cadastral map is less up to date than the Record of Rights, which the village officers maintain based on first-hand information on land use and occupancy. Roughly half of villages in Kerala have a reasonable standard of cadastral maps available. The Cadastral Index Map, which is compiled from the Field Book by the Department Land Records and Survey, has been scanned for 828 villages. The individual maps and records have not been scanned. These are stored in indexed archives, often without climate or dust control, and many are in a bad or poor condition to the extent that their digitization would need to be preceded by conservation. Historically, the process of updating Kerala’s land records was revived in 1964 with a program of cadastral resurveying. By 2018, 901 villages had been resurveyed and the Record of Rights and the Cadastre Index Map were in a workable state, but still maintained in paper format and in local (rather than national) coordinate systems. While there is a state- wide three-order geodetic network connected to Survey of India’s national network, many old cadastral surveys were done in a local coordinate system and have not been georeferenced to the national system. New surveys are being carried out by GPS to the WGS -84 global coordinate system. On November 1, 2021, Kerala launched a massive new digital survey as part of the ‘Ente Bhoomi’ program. 1,550 villages of Kerala’s 1,666 villages will be surveyed in four years. After that Kerala will have an up-to-date land parcel map and record. Cadastral Map in Kerala, India. Mika Törhönen 2. Land Administration and Management in SAR  |  15 Without a comprehensive and accurate land register, history and tradition, they are commonly in need of not only are affected persons at risk of not receiving modernization. These systems were developed for local compensation to which they are entitled, but the ownership and revenue collection, in a slowly evolving project budget faces risks of fraudulent claims. Those predominantly agrarian world. South Asian realities trying to carry out projects can be faced with new today are very different with high demand on land and rights or assets created for the sole purpose of gaining rapidly changing landscapes, and systems have not compensation - as well as interlopers trying to gain an evolved accordingly. Land administration in the region unjustified share of the compensation pot. The poor tends to be institutionally and functionally fragmented state of land records also makes it difficult for public and geographically incomplete. Moreover, the recording officials to represent the state and government lands, and management of state lands is commonly vested which are often poorly recorded and commonly under in multiple institutions, and information on state and dispute or encroachment. While all of these challenges public lands are often historical rather than current, are being resolved, the project budget mounts and the non-standardized, and not integrated. Rural and urban project falls ever further behind schedule. land administration systems are largely separate, with some notable exceptions, such as the unification of systems in Karnataka, India. These rural and urban land 2.2 Land Records and Maps in records tend to overlap in urban fringes, causing grey South Asia areas and informality, as urbanization spreads to what were once rural lands. This creates informality and South Asian land administration frameworks date back disputes, and a need to consult several different land to British colonial times and despite having a proud records for transactions. Land Records in Pakistan How land records became de-linked from revenue records Pakistan’s legal framework is fairly representative of land tenure systems in South Asia. The terms “land” and “property” are often used interchangeably under Pakistani laws. Property rights in Pakistan are protected under the 1973 Constitution, as well as by many specific laws that deal with various types of property and aspects of property rights. Land areas not held by private parties are owned either by the Provincial or Federal Governments, and rights to extractives belong to the Provincial and Federal Governments in equal share. Pakistan also has tribal areas where tribes practice customary tenure outside the statutory tenure system and coverage of land records. The Deeds Registers and Revenue Records include the deeds and records of city center land parcels that have been allocated to Cantonments, Development Agencies, and Cooperatives. Subsequent developments within those urban allotments have not been recorded in the Revenue Records. The Registration of Deeds was also historically voluntary, though more recently it has become obligatory in some provinces. As the registration of sales led to liability to stamp duties, not all properties in Cantonment, Development Agency, and Cooperative areas can be found in the Register of Deeds or in any Revenue Records. Cantonments, Development Agencies, Cooperatives, and others maintain their own land records on the land plots, properties, and rights in their areas. They also provide land registration services to land and property owners, banks and others. However, these semi-public land records are not reflected in or linked to the Revenue Records or the Excise and Taxation’s UIPT (Urban Immovable Property Tax) records. As a result, for example, Punjab Province has over 200 standalone land records, Sindh has hundreds, and Baluchistan and Khyber Pakhtunkhwa dozens each. Overall, the Revenue Records and Housing Agency Records combined cover the entire geographical areas of Punjab and Sindh Provinces (with minor remote area exceptions), but only half of Khyber Pakhtunkhwa’s territory and 5 per cent of Baluchistan’s land area. The unrecorded areas are either inhabited by or historically classified as tribal areas practicing customary tenure. Currently, Khyber Pakhtunkhwa province, following its merger with the former Federally Administered Tribal Areas (FATA), is exploring ways to expand land record coverage in the tribal areas. 16  |  Access to Land in South Asia: The World Bank Guidance Note Digitalization of deeds in Punjab, Pakistan. Dong Kyu Kwak Governments in South Asia are taking significant steps that record deeds, mortgages, leases, and other legal to remedy this situation. Modernization and digitization documents on land and property. In general, these of land records across the region have begun, and most registries in SAR capture the more valuable property governments have placed the integration of land and transactions, but avoidance also exists due to historical geospatial data and services on their agendas. However, title chain issues and Stamp Duty and mutation fees. implementation of these steps remains incomplete. Regional policies have called for modernizing land Furthermore, land administration systems in the region administration systems by updating to title registration tend to operate on state funding and as civil servant systems and creating parcel-based maps and up-to-date operations rather than as fee-based, operationally and digital land records. Sri Lanka introduced a title financially independent services, which the World Bank’s registration system in 199810 and India has a policy global experience suggests has led to more up-to-date of moving away from deeds registration and toward and reliable records. a conclusive title system. But progress in Sri Lanka remains partial, and in India, States have not yet 2.3 Registration of Transactions implemented title registration. Global experience and Rights suggests that the corporate governance and public perception of their service quality define land record Deeds Registries perform most registration of success much more than the legal power of their transactions to land and properties in the region. For certificates. instance, there are 45 Deeds Registries in Sri Lanka9 9 Managed by the Registrar General’s Department of the Ministry of Public Administration and Management (MOPAM). 10 Registration of Title Act No. 21. 2. Land Administration and Management in SAR  |  17 Land Records in Sri Lanka When state ownership transforms land tenure Sri Lanka represents a distinctive case in the region, as 85 per cent of its territory consists of State land. These lands are made available to individuals and entities through a range of tenures, including land permits, land grants, leases, land releases to government agencies, and land releases through vesting orders. Many of these tenures are formalized in response to applications made at Divisional Secretariats, with varying requirements for approval by provincial and central authorities. Land can also be granted for use by presidential decree. Obtaining any of these permits and grants is typically a complex process. Overall, state land tenure in Sri Lanka can limit access to institutional credit. The process of converting to a tenure that provides access to institutional credit is mostly off-limit and can take many years. There are restrictions on trading most use rights on State lands, but informal transfers nevertheless occur. Title registration is carried out by the Survey and Land Settlement Department, and it is intended to replace deeds registration. The implementation of title registration has taken longer than anticipated, as there are complications surrounding the cost and feasibility of both survey and adjudication processes. Of Sri Lanka’s private properties, less than half are estimated to be registered and approximately 3 per cent are titled. Registration is not mandatory and provides no legal guarantees of the rights that are registered. Sri Lanka, Register of Deeds. Mika Törhönen 18  |  Access to Land in South Asia: The World Bank Guidance Note Land records in Nepal An incomplete modernization process Nepal has a cadastre and a deed registration system that are interlinked but not integrated. The system provides no guarantee of title, although ownership certificates are being provided to landowners. The responsibility for registration of land transactions lies with landowners; national or provincial governments are under no liability to register transactions. Land ownership certificates originate from the 1964 land reform, and multiple programs thereafter. The cadastre was originally established for fiscal purposes to maintain cadastral records and maps. A systematic cadastral survey was started in 1960s and was completed in 1999. Today, the formal land administration system covers 24 percent of Nepal’s territory, which is predominantly mountainous. Land registration and cadastral activities are carried out by the Ministry of Land Management, Cooperatives and Poverty Alleviation’s Survey and Land Management Departments in local Land Revenue and Survey Offices, which operate separately. The process of modernizing the land information and management system started more than a decade ago. The Deed Register is operated with a Land Record Information Management System (LRIMS) and the cadastre and mapping operate under the Nepal Land Information System (NELIS). Both systems function well, but there is a lack of communication between them. This often leads to partial duplication of data and delays in completing split/merge transactions, and results in inconsistency between the two datasets. In the 2015 Constitution, local governments were mandated to provide some land administration services, and the Ministry is currently envisioning a transfer of simple land administration services to the local level. However, local entities have no resources to maintain cadastre or deeds registration, and thus the national government is considering providing them with web-based services to complete these tasks. Unfortunately, there are discrepancies between the digital records in the LRIMS and NELIS systems and both departments maintain parallel paper and digital records, which hints at the delays and difficulties with the larger digital transfer process in the land administration sector. India has been implementing the Digital India 2.4 Revenue and Transaction Land Records Modernization Programme (DILRMP) nationwide, which started as an integral part of the Records Digital India Policy. The DILRMP guides States to invest As is common across the region, Pakistan’s main land in land records11 as the basis for all development, records are the Revenue Records, or more accurately including infrastructure investments, planning, the Record of Rights, and the Village/Cadastral Maps, construction, revenue generation, and jobs and maintained at village level by the State/Provincial Boards growth. In theory, these upgrades to land records and of Revenues. In addition, the Boards of Revenues (BoR) investments in digitalization match international best or Departments of Registration maintain Registers of practices, particularly when coupled with institutional Deeds that, among other documents, register property reforms that enhance the operations of land authorities. transfers and other transactions, such as mortgages, But while several Indian states have made solid thereby creating an overriding claim to unregistered progress in implementing DILRMP, financing from the properties. The historical Records of Rights and the national government and states has been inadequate Registers of Deeds are person-based records, but the for completing the job, particularly when it comes to Cadastral Maps provide a survey number as a common the tasks of re-surveying records and creating a fully identifier in Pakistan and many Indian States. Common digital system. identifiers and digitalization jointly transform these into land parcel-based records, which global evidence 11 The DILRMP modules include (1) Computerization of Land Records, (2) Survey/Re-Survey, (3) Computerization of Registration, (4) Modern shows is a key step for the comprehensive recording of Record rooms, and (5) Training/GIS/Legal FW/Programme Management. land rights. 2. Land Administration and Management in SAR  |  19 Cadastral Map in Nepal. Mika Törhönen 20  |  Access to Land in South Asia: The World Bank Guidance Note Bangladesh. New National call center on land records. Mika Törhönen Land Records in Bangladesh When land records cannot keep pace with urbanization In Bangladesh, the Ministry of Land maintains the Khatian (the Records of Rights) and the corresponding Mouza Map of land plots as national cadastral records serving citizens in its sub-district (Upazila) and union (Tahasil) offices. The Khatian is a person-based record, which includes all land plots the person in question fully or partially owns in a given administrative area. These records cover public lands, but as Khatian are kept as per map sheet, there is no centralized inventory of state and public lands or reserves. Parallel to Khatian, the Ministry of Law facilitates the registration of property transaction deeds. The government has initiated several modernization programs. These include the national land classification program, Khatian automation, Deeds Registry digitalization, records and survey strengthening, as well as programs to provide electronic services. While the Deeds Register registers every land transaction or mutation, and the Khatian records are updated to reflect ownership changes and land plot partitioning, the Mouza map is not sporadically updated, but instead left to wait for the next geographical records and maps updating process, called the Settlement. The entire Khatian of every Mouza area is verified systematically during this process, and new Mouza Maps are prepared. This system may have worked well in previous eras, but it cannot keep up with the pace of urbanization. The modernization challenges are significant. Studies suggest that 80 per cent of civil and criminal court cases concern land and property disputes. Roughly 20 per cent of Dhaka’s population live in informal settlements. The state of records and informality hamper all planning and development, so that much of the population and economy are subjected to insecure tenure arrangements and infrastructure investments are compromised by challenges in accessing land. 2. Land Administration and Management in SAR  |  21 Notably, rural and urban fiscal records are often not In Pakistan, the BoR in all provinces have invested in unified in the region. The Revenue Records originally digitizing the Revenue Records. In Punjab, the Record pertained to rural areas, but as urban areas expanded of Rights has been fully digitized (establishing the Land many were included in these records. The manually- Records Management Information System, LRMIS), and maintained Records of Rights seems to provide a good progress is being made in Sindh (establishing reasonable record of land holdings and holders in rural a Land Administration and Revenue Management villages – it is considered the most up-to-date land Information System LAR-MIS). Similarly, Khyber record in SAR and has evolved into de facto cadastres. Pakhtunkhwa and Baluchistan have begun the process In Punjab Pakistan, mutations to parcel boundaries are of digitizing the Record of Rights. However, contrary to processed manually to adjust historical maps, which the intention of digitizing the land recording processes, appear to function effectively in rural parts of the most provinces of Pakistan continue manual updating province. However, the local cadastral map mutations the Record of Rights in BoR village and district offices, are rudimentary and don’t translate to digital, online, although Punjab province manages the Record of or centrally maintained mapping. These records have Rights digitally. Cadastral Maps have been scanned (as often not been able to keep up with urbanization, images) in many parts of Pakistan but only converted to resulting in growing informality in urban areas. digital maps through vectorization and georeferencing for small areas of Punjab and Sindh. 2.5 Maps, Property Valuation, and Transaction Taxes In Pakistan, deeds, the Record of Rights, and Revenue Maps are mostly connected through a common parcel number. Many Indian States have also established the same interlinks as well as linked these records to the national census. In Sri Lanka, the Survey Department has developed a national Cadastral Map in SLG99 national coordinate reference system to support title registration12. Thus, the titles on private lands have been linked to a seamless cadastral map, though this currently applies to only 3 per cent of all properties and not the deeds. Typically, in the region, Stamp Duty on property transfers and various registration fees are collected at the time of deeds registration. Ministries of Justice or Law ministries or, in case where integration has progressed, a joint land records authority typically carry out this task. Agricultural taxes are collected by Revenue Departments based on the Record of Rights and crops statistics, and Tax Departments or local governments collect urban property taxes. In cases 12 Sri Lanka’s title registration mapping covered close to 1 million land A Server hosting all land records of a State in parcels in 2014, and in 2015 the Registrar General’s Department South Asia. Mika Törhönen recorded 25,500 transactions of land titles. 22  |  Access to Land in South Asia: The World Bank Guidance Note Property Valuation and Taxation in Punjab, India Boosting municipal revenues to meet the demands of rapid urbanization Urbanization has placed enormous stresses on the Indian state of Punjab. The state faces rapidly increasing demand for basic services like water, sanitation, electricity, health, and education. Cities and municipalities in the state are in a difficult position: They are the leading service providers, yet lack authority over both state-determined municipal tax rates and development grants and transfers, which are determined at the national level. The review of Punjab prepared for the 14th Finance Commission drew attention to the state’s indebtedness, and also raised concerns about the State Level Public Enterprises (SLPEs). Improving the coverage and buoyancy of municipal revenues is critical for empowering them to meet their increasing responsibilities. Punjab’s 5th State Finance Commission has indicated that policies to improve local property tax recovery are underway. The State’s goals include more effective, streamlined tax collection methods, with incentives for timely payments and penalties for defaulters. Improving service provision will require new approaches to underwriting revenue buoyancy, particularly for municipal annual property taxes and the transition to capital value-based annual property taxes. There are, in addition, critical new demands for modern valuation expertise, which is highlighted in Punjab State’s accounting manual. The Punjab Municipal Accounting Manual, 2017, Chapter 10, Tax on Buildings and Land and other taxes reflects the national trends and guidance in accounting and discusses the annual property tax and its administration. Chapter 20 reviews fixed assets, including land. These are dealt with on a book value less depreciation basis with no depreciation allowed on land. There is a provision for revaluation, but the provisions for the basis of revaluation do not appear to be specified in Chapter 20 or the definitions section. Addressing such matters in the future will require appropriate data on the property market, coupled with professional valuation expertise. Increased action at the municipal level is also required to implement the needed changes to improve property tax collection. The revitalization of the property tax will reap benefits both from a revenue perspective and from the standpoint of improving equity between taxpayers, and studies are underway to prepare a time-bound action plan for transforming this tax system into a capital value-based system, and instituting modern valuation practices. such as in Gujarat in India, where the boundaries of substantially longer periods. It is therefore common for urban local authorities have been extended to include such fiscal records to be out of date, especially when it villages in the periphery, property owners may pay both comes to new housing. a land tax to Revenue Departments and property tax to Property valuation infrastructure is weak across urban local governments. the region due to outdated valuation systems and In Pakistan and India, the State or Provincial Excise, challenges with access to reliable land market Taxation and Narcotics Control Departments usually information. Registered transaction values are maintain land and property records on urban properties. commonly understated. This causes loss of revenues, This is used for recurrent property taxes (Urban and places pressure on governments. In cases of Immovable Property Tax, UIPT) and applies to fixtures compulsory acquisition, it contributes to lower than on land. These are tax records, not legal land records, market rate valuations and results in litigation due linked to valuation tables for defining the taxable values. to disagreements over the level of compensation. An More often than not they exist in parallel to the Records area-based valuation system that defines ‘Fair Values,’ of Rights in areas that have urbanized during the past which constitute the minimum applicable values for decades or century. They have largely been digitized in all Stamp Duty and Registration Fees, aims to mitigate provinces, but have experienced issues with coverage. the problems caused by the under declaration of These records are typically not continuously updated, transaction prices. However, the Fair Values tend to be but subject to periodical renewal. Renewal is to be done outdated and very low compared to market values, at ideally every 5 years, but, in reality, often happens after least in developing urban areas. 2. Land Administration and Management in SAR  |  23 Karachi, Pakistan. Mika Törhönen 24  |  Access to Land in South Asia: The World Bank Guidance Note Pakistan’s Urban Property Tax Factors that undermine revenue generation UIPT is collected by the provincial Excise, Taxation and Narcotics Control Departments on built properties. Cities in Sindh and Khyber Pakhtunkhwa are now replicating Punjab’s earlier success in investing in a new digital fiscal record of land and buildings for UIPT. The tax is generally levied at a flat rate of 10 per cent, but tax rates vary depending on the province. In Sindh, the property tax is levied at a flat rate of 20 per cent on the Annual Rental Value (ARV) of the land and building, while Punjab applies progressive rates. The valuation infrastructure is limited in Pakistan, and the ARV method struggles to produce taxation values close to actual market values. Limited access to market information constrains property valuation in Pakistan, as property transfer taxes incentivize the under-declaration of transaction values. The ARV method is not being used in Khyber Pakhtunkhwa, which adopted an area-based market valuation methodology in 1997. The valuation table values in Sindh are available for large areas with homogenous tax rates. High value properties, such as hotels, shopping malls, multi-story offices, residential buildings, and industrial properties are thus valued using standard general parameters, ignoring location-specific impacts. Properties that are tenanted receive double the rate of owner-occupied properties. In Sindh, the valuation tables were last revised in 2001, but are being renewed under a World Bank-financed project. There are multiple exemptions applied to the UIPT, including exempting small properties, so that roughly 40 per cent of total properties are excluded from the tax. Land and property-based revenues represent a huge of these factors contribute to low collection rates and untapped opportunity for improving local services. inefficiency in the property tax system. Property tax collection is commonly minuscule compared to its potential in cities and towns, as 2.6 Land Litigation collection is hampered by incomplete records of the tax base, limited access to market data, and outdated In South Asian countries, land disputes are handled valuation practices. Governments compensate for by both administrative entities14, such as revenue the inaccurate tax base by setting inflated tax rates, departments, and local judicial bodies. Land rights- which in turn disincentivize owners from property related litigation dominates courts across the region. registration and the declaration of true transaction There are a multitude of factors that have led to prices. In Pakistan, UIPT collection rates are low due to widespread litigation over land disputes. It stems in weak systems for billing, collection, and enforcement. part from a reliance on a Deeds Registration system The government has sought to change this by making that until recently allowed registration either entirely tax returns compulsory for individuals owning larger blindly or without verifying a land parcel’s chain of title. properties, the 2012 introduction of a Capital Gains The Records of Rights are also largely out of date, and Tax, and measures to counter under-documentation tax there is a widespread lack of attention to detail in terms avoidance in the property market. of boundary alignments and parcel sizes. Additionally, vast State land areas have been encroached upon to a In India, weaknesses in the property tax include significant extent, causing property disputes between incomplete property cadastres, significant proportions the occupants and authorities. of properties not being registered, tax rates that are out of alignment with the higher rates often levied by global Uncertainties over title are an ever-present problem competitors, a wide range of tax exemptions, and under across the region. In Pakistan’s Punjab province, the valuation of properties. The system is also hobbled by Lahore Development Authority is subject to some limited data on the transaction prices of comparable 8,000 open court cases and the Lahore Defense properties, municipalities’ capacity constraints, and Housing Authority has roughly 10,000 outstanding the fiscal transfers enjoyed by urban local bodies.13 All court cases over the ownership of land that it has 13 Awasthi, R., Nagarajan, M. (2020). Property Taxation in India: Issues acquired. Meanwhile, an estimated 60 per cent of Impacting Revenue Performance and Suggestions for Reform, Governance Global Practice Discussion Paper No. 5. World Bank, 14 It is common in the region for land boundary and ownership disputes Washington, DC. Retrieved from https://openknowledge.worldbank. to be heard by revenue courts in parallel to local courts of the judicial org/handle/10986/33655 License: CC BY 3.0 IGO system. 2. Land Administration and Management in SAR  |  25 West Bengal Mouza Map archives. Mika Törhönen 26  |  Access to Land in South Asia: The World Bank Guidance Note Cadastral Maps in West Bengal Challenges with the Settlement process In the Indian State of West Bengal, the Mouza Maps function as the State’s cadastral maps, and are maintained through a Settlement process. The latest Settlement process (called the LR), a state-wide cadastral mapping update, started in 1971 and is now nearing completion. No other cadastral map updating has taken place. West Bengal has experienced rapid urbanization in recent decades. Because most Mouza Maps were last subject to surveys decades ago, the government estimates that a new cadastral survey is needed in all urban areas of the country. Mouza Maps are the cadastral maps for all of the State apart from central Kolkata, which uses Smart Maps. As a result, the expanding Municipal Corporations and Municipalities of West Bengal do not have access to current land plot mapping. When mapping is not updated, the land record (Khatian) also becomes out of date. The Khatian is a record of ownership shares of land plots that a particular owner possesses. When plots are partitioned, the new plots are not recorded on any map, resulting in the Khatian record becoming out of date. Alternative urban records, called the holding records (of built properties) have been developed by Municipalities to serve the needs of urban governance and property taxation. But the cadastral maps and records are still formal records, and lapses in their accuracy increases the risk of overlaps with the holding records, as well as fraud and uncertainty. This in turn impacts the property market, planning, infrastructure financing, revenue collection and all land-based activities. The government has already made considerable progress with digitizing and automating the Khatian record and investing in digitalization of the Register of Deeds. It is now considering systematically improving urban cadastral maps and records, and unifying various records and mapping under a joint Land Information System. Rethinking West Bengal’s process for updating its cadastral maps updating has begun, and the government is considering alternatives to replace the Settlement process with a day-to-day cadastral surveying practice on an assignment and fee basis. court cases in Sindh province are related to land. in multiple processes over time. In Punjab, disputes These same dynamics occur in India as well, where between Development Authorities and preceding litigation over land dominates courts in Kerala and owners are very common and stem from lack of clarity other States. In Bangladesh, 80 per cent of court cases in the original allotment, their extents and boundaries, relate to ownership, property boundary alignments, and the rights that may have existed in the area but compensation levels for land acquisition. were not known or considered when the allotment In Pakistan, the root cause of land-related litigation was made. Deliberate frauds and manipulation of is that the Cantonments, Development Authority records also occur: In Karachi, for example, cooperative allotments and land rights regularization have occurred housing societies have been accused of deliberately Global best practice for reducing land disputes Improving land records is just the beginning Updating and integrating land records has a positive impact on land related litigation, but complementary reforms are also required. Investments in mass valuation systems using improved land records and registered transactions as base data represent another solid step forward. Gradual progress towards a more market-based valuation infrastructure will reduce compensation-based litigation and improve fairness and equality between landholders in taxation and land acquisition. Another common problem is that local courts tend to lack the expertise or capacity to settle land ownership, boundary, or land compensation cases. Evidence suggests that technical land disputes should not be left to clog the court systems, but instead should be solved at an administrative level where possible, and only be subject to court ruling if the parties disagree with the administrative solution. Many countries have made use of Lands Tribunals, or other specialized courts, in which specialist judges can be assisted by lay experts, to handle land, valuation, and property disputes. 2. Land Administration and Management in SAR  |  27 Nepal’s earthquake 28  |  Access to Land in South Asia: The World Bank Guidance Note 2015 caused long lasting damage and homelessness. Mika Törhönen encroaching on public lands and selling land plots (i) Informality under fake allotment papers. There have also been multiple reports concerning the governance practices In Pakistan, the Record of Rights and Cadastral Maps of local collectors, who facilitate entries to the Record are most outdated in informal settlements (called of Rights and Cadastral Maps. Katchi Abadis) and areas that have undergone rural- urban conversion without due process. This is a In Sri Lanka, most land-related disputes relate to particularly glaring problem because more than half of land acquisition compensation levels. The low levels the country’s urban population are estimated to live in of compensation stem from the country’s valuation slums and squatter settlements. system, which is thorough but relies on out of date market data and building cost tables. These disputes A recent study15 estimates urban informal settlements take excessive time to adjudicate: Local courts lack accounts for over 8 per cent of Karachi’s urban area expertise to settle technical and legal disputes over and fulfils over 50 per cent of the city’s housing needs. land that fall within their jurisdiction, as there are In Punjab, an estimated 20 to 25 per cent of urban no administrative processes to resolve ownership, properties are not registered in any land record or map. boundary, or land compensation cases. In Sindh Katchi Abadis can be converted by the Sindh Katchi Abadi Authority (SKAA) into leaseholds, subject to the area meeting basic requirements as a living area. 2.7 Tenure Insecurity and Informality The same process exists in other provinces as well, One of the primary issues with making land available and multiple Katchi Abadis in Punjab and Sindh have for infrastructure investments is identifying all those been notified about the regularization of land rights, who may have reasonable claims over it. Weaknesses but these processes often remaining pending without in land records can mean that claims that ought to resolution. be recognised may not be recorded. These include claims that arise through long peaceful or uncontested (ii) Tenancy occupation and failures of land recording systems Various forms of rural tenancy remain in the region to recognise legitimate claims. Problems with land despite decades of reforms and progressive policies. records can mean that the absence of a record cannot Tenancies from private land holders and the State are be taken to mean the absence of a legitimate claim but constrained by land use and transfer restrictions, lack may, instead, be the result of defective processes, lack of formal registration, and standardized contracts and of capacity or competence, or corruption. terms. These restrictions cause insecurity of tenure, Housing lending in Pakistan How land tenure informality negatively impacts financial inclusion Informality in land tenure is often related to informality in other aspects of life. For instance, Pakistan’s progress on financial inclusion has also been slow: In 2017, only 21 per cent of Pakistanis had a bank account and, more tellingly, while 37 per cent borrowed money, only 2.3 per cent did so from a financial institution. Only 1.1 per cent of Pakistanis had an outstanding housing loan, compared to 4.6 per cent in India, 6 per cent in Indonesia, 26.7 per cent in UK, and 48.3 per cent in Sweden. Overall, Pakistan’s mortgage market remains very small. The mortgage market’s development has been hampered by high interest rates and limited mortgage offerings; in 2018, the mortgage market volume was equivalent to approximately 0.3 per cent of GDP. In practice, commercial bank mortgages are only accessible to high net income earners. Housing loan volumes are on an upward trend, however, growing by an average of 29 per cent annually from 2016 to 2018. 15 Prepared for the Karachi Strategic Development Plan – 2020 (KSDP-2020). 2. Land Administration and Management in SAR  |  29 A large solar park has become the neighbor for these boys in Sonagazi, Bangladesh. Mika Törhönen stagnate land use, discourage innovation, and lock A common reason for poverty is dispossession of families into subsistence farming. traditional lands and prohibitions on access to ancient forests. When commercialisation spreads into rural The Rights of Indigenous, Tribal, and (iii)  and remote areas, the lack of formal recognition Marginalized Groups to Land and protection of indigenous peoples’ rights to land and natural resources results in land insecurity and Estimating the number of indigenous peoples (IPs) vulnerability - and potentially to conflict and violence. in South Asia is complex, as several of the region’s Community based participatory mapping approaches governments do not acknowledge the concept. However, are spearheading global attempts to overcome these a recent estimate suggests there are in excess of 130 challenges, but the required legislative frameworks and million IPs in the region. The marginalization of these political will necessary for large-scale implementation groups has resulted in their continuing to be among is often lacking. the poorest of the poor, even though sustained growth and poverty reduction efforts across the region have (iv)  Gender and Land significantly contributed to declining poverty rates16. According to the Social Institutions and Gender Index 16 Errico, S. (2017). The rights of indigenous peoples in Asia: Human rights-based overview of national legal and policy frameworks against (SIGI) compiled by OECD 17, women experience medium the backdrop of country strategies for development and poverty reduction, International Labour Organization, Gender, Equality and Diversity Branch, Geneva. Retrieved from https://www.ilo.org/wcmsp5/ 17 OECD. (2014). SIGI: Social Institutions and Gender Index – 2014 groups/public/---dgreports/---gender/documents/publication/ Synthesis Report, OECD, Paris. Retrieved from https://www.oecd.org/ wcms_545487.pdf dev/development-gender/BrochureSIGI2015-web.pdf 30  |  Access to Land in South Asia: The World Bank Guidance Note Gender and land in Nepal Women maintain land, but rarely own it In the past, a major barrier to daughters inheriting their parents’ property was the fact that it was not mandatory to share property with them, unless they were over 35 years of age and unmarried. Only 9 per cent of total households in Nepal feature female ownership of land; in 11 percent of households, women are owners of the house or land. Although there are tax exemptions for land registered in women’s name or in joint ownership, many women appear unaware of these provisions. Nevertheless, women are the ones who manage and utilize natural resources on these properties. Male migration and involvement in non-agricultural sectors means that women are tasked with maintaining both the productivity and suitability of the land and mitigating the adverse effects of climate change and other natural calamities. Their responsibilities often include agricultural work, cattle rearing, collection of fuel and fodder, and protection and conservation of forest and water sources. Women’s land ownership is also low because patriarchal social structures discourage them from participating in community activities. These social norms, often dictated by husbands and parents-in-law, mandate that men are the default head of the household and are in charge of extra-household affairs. Gender norms also encourage the participation of men in consultations, where the presence of only one person from each household is often sought. River island housing in Jamalpur, Bangladesh. Mika Törhönen 2. Land Administration and Management in SAR  |  31 level discrimination on access to productive and continue to function effectively in rural areas, but financial resources in India, Nepal, and Sri Lanka, and a need to be modernized to serve today’s predominantly high level in Pakistan and Bangladesh. urban and industrial economies. Informality, on-going litigation, and multiple varyingly out of date and When it comes to access to land in SAR, women’s conflicting land records make the process of checking opportunities to access or own land in their own name who has what property rights complex and expensive are often limited. According to a 2010 USAID study, 4.6 and is a major barrier to infrastructure investments. per cent of farms in Bangladesh, 8.1 per cent in Nepal, and 12.8 per cent in India are owned by women18. The Core challenges include the absence or neglect of legal Constitution of Pakistan states that all citizens can own location-based land records in many historical city property, both men and women, and Shariah stipulates centers - the most valuable areas of countries, states, or land rights for women. However, studies19 have found provinces. This absence compromises land registration, that culture and customs have resulted in inequality mortgaging, market functionality, and security of between genders in access to land: 27 percent of tenure. The large number of court cases related to land women in Pakistan do not inherit land despite holding rights in Pakistan, Bangladesh, and India demonstrate legal inheritance rights to it, and 72 percent of women the urgent need to implement reforms. do not inherit a house. Women are 25 percent less likely than men to own land and 69 percent less likely to own While digitalization and modernization of land records a house (according to the Pakistan Demographic and has progressed in the region, with national and regional Health Survey, 2017-18). As a rule, rural subsistence governments undertaking important initiatives, the farming has followed the pattern of land passing from integration of land records and penetration of web- father to son. based services have been slow. The absence of integrated records makes the task of due diligence Shariah law ensures a share to all heirs, but inheritance before undertaking infrastructure investments complex commonly does not lead to subdivision of holdings and costly and can result in those with legitimate land but rather to co-ownership between heirs. Typically, rights being missed. As a result, housing development majority holding male heirs continue farming, and agencies, local governments, and other parties have relatives, including women, hold shares in the farm or developed ad hoc land and property records that serve pass them to the primary holder. Thus, women’s rights their needs rather than those of the public. Countries, to land continue to be mediated by men. However, states, and provinces lack a single point of truth on several countries, including Pakistan, have taken steps land and properties that all can share and rely upon. to improve the situation by enacting or preparing new Until comprehensive, integrated, and current land legislation. records are achieved, titles and rights on land are, in effect, undefined, and represent a major source of 2.8 Conclusion business and social risks and constrain infrastructure investment. There is the danger that well thought- South Asian land administration systems largely reflect out proposals may fail to be completed or experience the historical Deeds Registration and Agricultural lengthy delays and cost increases as a result of not Revenue Records and Maps, as well as urban fiscal being able to access land in a timely manner because records developed for recurrent property taxes. These of uncertainties over who has property rights over it systems served their countries well in the past and and lengthy court cases. Valuation systems and the 18 OECD Stat. Gender, Institutions and Development Database (GID-DB) 2019, valuation infrastructure in the region are also in need 19 Khattak, S. G., Brohi, N., and Anwar, W. (2010) Women’s Land Rights: Research Findings from Pakistan, Project Report Series # 18, of upgrading to be able to produce assessments Sustainable Development Policy Institute, Islamabad. Retrieved from that reflect current market values. There can be a https://sdpi.org/sdpiweb/publications/files/Microsoft%20Word%20 -%20project%20report%2018.pdf gap between the quality of valuations undertaken 32  |  Access to Land in South Asia: The World Bank Guidance Note on commercial properties for international investors reliable information but also resolving of overlapping and those used in property taxation and compulsory and competing claims, some of which date back many acquisition. years. In effect, those carrying out infrastructure projects may have to undertake systematic land The deeds systems often do not have the required registration of the areas affected to ensure that they checks and rigor in place to serve as land registers. can acquire the land needed and that those with Many transactions are informal and unregistered, resulting in a gap between what appears in the records property rights and fully compensated for any losses. and the reality on the ground, especially in urban Bringing the land records up to date and integrating fringes. them will require customized interventions at national and sub-national levels. These interventions could be The current state of land records, mapping, and embedded into infrastructure projects or function as valuation systems is a source of uncertainty and risk standalone projects and support to governments. for anyone undertaking investment in South Asia. As a result of these challenges, infrastructure projects Infrastructure investment clearly cannot be delayed often have to start by reconciling what land records say until the problems with land records are resolved. This with what exists in reality. This is time consuming and would be impractical and deny citizens the benefits expensive, since it requires not only the collection of of such investment. However, until all land records, Lahore, Pakistan. Bahria Town housing development agency offers streamlined services for apartment registration. Mika Törhönen 2. Land Administration and Management in SAR  |  33 maps, and owners are connected in an integrated land effective land administration in many countries. The administration system, accessing lands in South Asia many programs across the region to digitize and to undertake infrastructure projects, especially in peri- expand the coverage of land records also should urban areas, will need to start with a systematic land be prioritized, and tight performance standards registration and adjudication process. This should be and completion deadlines should be enforced. factored into all infrastructure investments, both in These programs have the potential for long lasting terms of the costs and the time disputes over title take improvements, impacting economic, social, and to resolve. The additional time and costs, together with environmental well-being. the delay before the benefits from the investment are Long-term success requires systemic improvements received, can result in some infrastructure investments through investment in land administration system not being viable. This is one of the biggest setbacks for programs and the provision of resources to private capital mobilization for social infrastructure. If implement them. India is working towards this end these issues are not resolved at the start of the project, with its Digital India Land Records Modernization there is the risk that it may have to be abandoned or Program and in Pakistan Punjab has made progress only partially completed. in digitizing the Record of Rights and integrating it The existing land administration institutions with the Register of Deeds. Also, Bangladesh has continue to serve certain segments of society well launched similar initiatives and reforms, and Nepal and can survive on that basis, but without dedicated and others are following. Success will require creating modernization efforts cannot meet the needs of an environment in which these improvements are society as a whole. There is need for institutional and sustainable through appropriate land regulation and policy reforms to integrate land administration, as establishing obligations and incentives for keeping the fragmentation of mandates and duties constrain land records current. 34  |  Access to Land in South Asia: The World Bank Guidance Note 3 Land Assembly 3. Land Assembly 3.1 Introduction resulting in much lower benefit-cost ratios than what had been projected. T his chapter examines issues associated with the assembly of sites for infrastructure investments. Infrastructure projects must secure land for The land needed for projects can be assembled in a multitude of ways. It can be accomplished through construction; if land is unavailable, the project will fail. voluntary purchases, in which the owners give up their property rights in return for freely negotiated It is not unusual for projects to be only partially compensation. Governments and private owners can completed because the entire land area necessary has also enter into various forms of cooperative agreements not been secured. The result can be highway schemes that enable land to be accessed for infrastructure that stop short of their proposed destination or are not investment. State land can be used for infrastructure linked into the rest of the road network, station area investments, though such projects often run into improvement schemes that include only part of the difficulties when the land is used by others – either locality, and RE schemes that are not viable as they are legitimately or through encroachment – or is governed only partially built. Projects can also fail because they by regulations, restrictions, and incentives that do not factor in the time and cost of securing the land, discourage making it available for alternative uses. Solar Park number 19 in Rewa Still, India. Surbhi Goyal 3. Land Assembly  |  37 In any case, State land is likely to be in current use for this may not be sufficient to remove impediments to another purpose so there can be an issue of determining the investments going ahead. priorities and whether State land is being put to the most effective use. Land pooling can be used in which a 3.2 The Problem of Land Assembly group of landowners, who can include central, regional The issues that arise with site assembly are applicable or local governments as well as private owners, to all types of infrastructure investments requiring sites voluntarily agree to contribute their land to a collective that are too large or complex to be in the ownership of a venture and to share in the benefits. Land pooling does single landowner. These challenges can be summarized raise questions about the value of each contribution to as follows. the whole and, therefore, what share of benefits each should receive. Finally, compulsory acquisition is often „„ Networks/Corridors: Any form of infrastructure used in site assembly and is legitimate when a project project that takes the form of a corridor or is in the public interest, its use is proportionate, and network requires the assembly of sites for the those deprived of assets and livelihoods are fully and entire project. Unless land is made available promptly compensated. for the entire project, it cannot go ahead as it is not feasible for there to be gaps. Holdouts The fundamental problem that is faced by all by individual owners cannot tolerated beyond infrastructure projects in South Asia is that land small-scale design adjustments. markets do not function very effectively. It is difficult „„ Large sites: The sites for major projects, such for private investors to convert agricultural land to non- as new airports, ports, dams, flood defenses, or agricultural uses or to gain clear title to land so that it power generation plants, can be too large to be can be repurposed. The implication is that governments in single ownership or take place in areas of high are likely to have to be involved in land assembly in density with small parcel sizes, and may therefore order to overcome these bottlenecks and, even then, have to be assembled from multiple owners. Colombo, Sri Lanka, sea filling. Mika Törhönen 38  |  Access to Land in South Asia: The World Bank Guidance Note „„ Areas with complex ownership patterns: Methods for Acquiring Lan Developments in urban areas, such as the redevelopment of railway station areas or yy Purchase urban renewal schemes, are likely to require yy Lease the assembly of a site from multiple owners as yy Public-Private Partnership they usually take place in areas characterized yy Tender by small-scale fragmented patchworks of yy Exchange ownerships. Site assembly must therefore yy Land Pooling and Readjustment involve multiple owners, which, given the state of land records and land services in the SAR, yy Joint Development is often problematic. A common challenge in yy Easement South Asia is the prevalence of lands belonging yy Donation to central and local government agencies with yy Planning Obligations historical rights that may not be current or even yy Compulsory Acquisition well-known, and policies that disincentivize their current custodians from using these areas in land development schemes. Public private partnerships (PPP) PPPs can be defined as “a long-term contract between 3.3 Methods of Acquiring Land for a private party and a government entity, for providing Site Assembly a public asset or service, in which the private party bears significant risk and management responsibility, Land needed for infrastructure projects can be obtained and remuneration is linked to performance”20. Typically, in different ways: the government either assembles the site or the project takes place on land the government already owns but, Purchase very often in SAR the contractor is required to provide Land and property rights can be purchased from their the site. Responsibility for building the project is passed owners. This can be done through a private treaty in to the private partnership, with the government leasing which the acquiring authority negotiates with individual the completed facility. owners. Critical to this process are accurate up to date PPPs have been used to deliver a variety of infrastructure land records that identify property rights and who owns investments, including bridges, roads, railway lines, the title to these. schools, hospitals, military housing, student hostels, and prisons. Typically, a private consortium finances Lease and constructs or refurbishes an asset, which the public sector leases for a period. At the end of the lease, the In many cases, the acquiring authority does not need to facility usually reverts to the public sector. The contracts purchase an entire plot of land to accomplish its goals. For vary depending on what the private partner agrees to instance, sites for telecommunications masts are often provide and its role in operating and maintaining the rented on the roofs of tall buildings or in fields or hills. facility during the period of the lease. The length of the lease should be at least as long as the project’s life expectancy, as structures are likely to revert to the landowner at the end of the lease. Rent will have to Tender be paid over the course of the lease, which could involve In this method, which has often been used for the price increases during the life of the project, for instance, delivery of RE projects, a government offers a number through periodic rent reviews to reflect prevailing market 20 https://ppp.worldbank.org/public-private-partnership/overview/ values, by an index, or a set percentage. what-are-public-private-partnerships 3. Land Assembly  |  39 of contracts for the supply of a good. Private suppliers Land pooling and readjustment then bid for these contracts, and those who are awarded them have the responsibility to build the facilities that In a land readjustment scheme, multiple property will enable them to fulfill the contract’s terms. This owners within a defined geographic boundary includes acquiring the land on which the facility is to voluntarily pool their properties in order to unlock be constructed. higher overall market value for the combined property. Those who join the scheme can expect to receive a In India and Bangladesh, this method has fallen out of share of the profits depending on the value of the favor for large-scale projects due to the risks of project assets they contributed. How this is done can be failure due to lack of land access. Governments are contentious as it is likely that different parcels make starting to see the need for proactive and pre-tender varying contributions to the project’s outcome, so qualification and the allocation, acquisition, and zoning rewards may not be equally shared. How rewards are of lands for these projects. paid could also be contentious. They can include cash payouts, the right to sell part of the development, or More generally, tenders can be used to acquire land with expected rises in the value of other land owned by owners being invited to offer land for purchase and to owners. The lead partner could be from either the nominate the price they are willing to receive, followed public or private sector. Owners have also, in some by negotiations once tenders have been evaluated. cases, leveraged a portion of their properties’ value to fund public infrastructure upgrades required to bring Exchange the project to fruition. This is more likely to happen if Suitable land for a project may be in the possession of the public sector contributes land for infrastructure as another owner who is willing to exchange it for an asset part of the pooling arrangement. It is important that of similar or greater value. Exchanges may also take those who contribute to land pooling do so voluntarily place between public bodies. and are not subject to any form of coercion. If coercion Bangladesh: Emergency 2007 Cyclone Recovery and Restoration Project 2008-18 Bangladesh is one of the most climate-vulnerable countries in the world, being subject to cyclones, associated storm surges and floods. In 2007 there were two waves of flooding followed by Cyclone Sidr, which breached costal and river embankments, causing flooding of low-lying areas and damaging houses and infrastructure. Over 3,000 people were killed and 55,000 injured, with over 13 million people affected and over 100,000 livestock killed. The cyclone hit when the rice crop was about to be harvested, with 113,000 hectares of crops destroyed and over 800,000 hectares of cropland damaged. The project included a number of activities, one of which was to rehabilitate and upgrade coastal embankments. As well as protecting cropland from inundations and saline contamination, the investment was aimed at allowing livelihoods to recover through increased productivity and incomes. There was rehabilitation of 501 kilometres of existing embankments, protecting 174,000 hectares of land and benefitting 3.8 million people. Erosion meant that there were examples of where the alignments of embankments had to be changed, thus requiring land to be acquired. Delays were experienced in completing the embankments, which prolonged the vulnerability of populations, agricultural land and assets to disaster risk for longer than intended. The affected people agreed to make available the land needed for civil engineering works while land acquisition and resettlement works were being undertaken. However, the completion of rehabilitation works was delayed due to delays in resettlement and land acquisition payments, resulting in the project having to be extended to allow completion of the works and payment of land acquisition expenses. The legal process for land acquisition and resettlement payment was slow and multi-layered, talking about 12-15 months from the initial surveys to compensation delivery. Incomplete and faulty ownership records caused even further delays. There were 28 polders affected by involuntary resettlement. At the time the loan closed out, compensation had been completed in seven polders and for 62 percent of eligible owners and 99 percent of eligible squatters. 40  |  Access to Land in South Asia: The World Bank Guidance Note Hotel in Nagarkot, Nepal. Mika Törhönen 3. Land Assembly  |  41 is used to achieve contributions to land pooling, then of New Bombay. Developers contribute financially and this is a form of compulsory acquisition. take the lead in managing physical construction of transit stations and the surrounding developments, Land readjustment schemes are used in some and the profits are shared between the parties. countries as an alternative to compulsory acquisition. In such cases, land consolidation policies are used to This can be a particularly effective development reorganize parcels and create land banks that can be method around stations in urban centers where there is used for infrastructure investment. In some cases, a surplus railway land. Funding in this way is provided for minority of owners who refuse to participate can be upgrading infrastructure as well as providing potential compelled to take part, or owners may be obliged to profit for the public sector21. Such deals help connect contribute a portion of their land if it falls within an increased value from regulatory changes and related area designated for development. In these scenarios, investments to funding for transit infrastructure. They policymakers sometimes argue that although part of benefit cities because the higher land values can the land has to be sacrificed, the remainder will rise in generate additional tax revenues and higher transport value to offset the loss. usage by fare-paying customers, resulting in demand for new retail shops, parking garages, leisure facilities, In Canada, pooling arrangements have enabled and residential buildings 22. Such land value capture Canada Lands Company to pursue development approaches can be challenging to achieve in cities schemes in conjunction with indigenous (First in developing countries, where land registries are Nations) groups and utility companies, as part of incomplete and efficient and accurate property valuation land settlements with First Nations. In Hyderabad, systems do not exist, and informal development may authorities have acquired land to widen roads and occur in the absence of proper controls. compensated owners by granting them the right to develop their remaining land at a higher density. Easement Where this is not possible, owners have been granted transferable development rights which they can use Infrastructure investment may require access over or to develop at higher densities in designated receiving under land, for instance, for electricity transmission areas or resell to developers. In Pune, Maharashtra, lines or gas pipelines. In these cases, the public body could enter into an access agreement with private land for the development of Magarpatta Township has owners, who would expect to be compensated for been acquired by enabling landowners and farmers allowing this use of their property. to receive a share of the sales proceeds in proportion to their landholding. Donation Joint development A public body may receive the land needed for infrastructure investment in the form of a philanthropic In these arrangements, the public sector contributes the value of public land into a joint venture and the 21 For instance, scope for this activity has been exploited in London by private sector contributes required equity and technical Transport for London using land around and air rights above stations for the London Underground network and by London and Continental knowledge to fund pre-development and construction Railways (the UK government’s specialist agency for the development of costs. This aims to ensure that the development of surplus railway land) at King’s Cross. 22 In Tokyo, for example, Tokyu Corporation, whose assets include infrastructure, such as transit stations and adjacent the T yoko, Meguro, and imachi lines, owns department stores, private properties, is well coordinated. Private owners supermarkets, hotels, banks and property developments along its rail lines and benefits every time a person chooses to live, shop, travel, or eat can also be joint developers with a public agency and along the rail lines. The Japanese approach is a private sector alternative receive a share of the benefits from the development to other forms of tax-based land value capture that rely on governments funding infrastructure and capturing value created by that investment as, for instance, happened in parts of the development through taxes on incremental value created or by levying fees. 42  |  Access to Land in South Asia: The World Bank Guidance Note Urban informality in Punjab, Pakistan. Dong Kyu Kwak donation. These donations can be an act of pure altruism the uplift in value could be returned to the community or can stem from an individual or a community’s desire in cash, land, or the construction of infrastructure. to have a facility like a school, clinic, or access road Developers may also offer contributions in order to gain built on the donated land. Donations must be voluntary additional profits from more intensive development. as any form of coerced donation is a method of Thus, for instance, if the construction of a new compulsory acquisition. Sometimes there are instances shopping center will result in traffic congestion, then in which a government takes land by putting pressure the developer may be required to finance mitigation on the owners to hand it over without compensation. measures out of their profits, such as building flyovers When coercion is used, this is a form of compulsory or bypasses. acquisition since the owner may feel that he or she has no choice but to hand over their property without being Compulsory acquisition compensated to avoid bad consequences from the In certain cases, the State can oblige landowners to sell failure to do so. their land and property rights so that they can be used in an infrastructure project. Compulsory acquisition Planning obligations also includes any situation in which a sale, donation, When developers secure development consent, this or the granting of an easement or other right takes has the effect of uplifting the value of their land. Part of place where coercion or the threat of coercion might 3. Land Assembly  |  43 be used23. The use of compulsory acquisition, or the stipulations. Instead, successful resolution usually threat of its use, can prevent holdouts by property requires new agreements between the occupants right owners who may be unwilling to participate in site and the State where the current possessions are assembly. Compulsory acquisition ought to result in the considered as legitimate assets. payment of fair, equitable, and timely compensation. However, this presumes that there is a governance The classic steps of systematic registration are system in place to ensure this happens, as well as a adjudication of rights, demarcation and survey of valuation infrastructure capable of assessing fair and boundaries, and documentation for registration. equitable compensation. After the results are publicly displayed, the process is concluded with a registration of lands, while any disputes are subjected to administrative or judicial 3.4 Systematic Parcel by Parcel dispute resolution processes. As the land records and Registration of Rights for documentary evidence are commonly incomplete or Land Assembly outdated and informality widespread in these cases, testimonies of witnesses will often have to be used as In cases where securing access to land is fraught, primary evidence for adjudication. infrastructure investments may have to start with a systematic registration of land rights, or - as common Once the systematic adjudication has resulted in a in South Asia - a land settlement process. These steps legal registration of private rights and confirmation of typically take place when land records are incomplete, State lands and their custodians, the land assembly title disputes common or titles are unclear, historical process can be accomplished with full and legal public land allocations are stagnating, or informal information on land rights and land use. Simple occupancy or public land encroachment compromises, purchases or compulsory land acquisition can secure delays, or halts land assembly. a new transport corridor or complex station area and Systematic parcel by parcel land registration is a developments can progress in a secure and predictable mass tenure security approach where whole areas environment. of land parcels are adjudicated and surveyed. International experience shows that by operating at 3.5 The Contrast Between Public and a large scale and applying new technologies, the cost Private Sector Site Assembly per land parcel can be low and a very high percentage of all disputes can be successfully adjudicated. The In the private sector, developers do not have recourse process also provides social legitimacy due to its to compulsory acquisition to acquire the land needed focus on transparency and community participation, for an infrastructure project. If owners refuse to sell, including the public display of results and the ability then the development cannot go ahead. But while to appeal rulings. The most difficult disputes tend developers can walk away from proposals that run to arise between State land custodians and long- into difficulty, either due to site assembly or other term informal occupants of these lands: A legalistic challenges, the public sector often cannot do the application of the State’s ownership rights can same. There is usually a social, environmental, or lead to social conflicts and will breach the World political imperative to public sector projects that Bank’s Environmental and Social Framework (ESF) makes it difficult to abandon schemes once a project 23 World Bank. (2018). Environmental & Social Framework for IPF has achieved the necessary backing. This can be the Operations - ESS5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement – Guidance for Borrowers, The World case even when it becomes obvious that a project is Bank, Washington DC. Retrieved from https://thedocs.worldbank. no longer viable due to rising costs, over-estimated org/en/doc/796881511809516397-0290022017/original/ EnvironmentalSocialStandardESS5FactSheetWBESF.pdf demand, or challenges with land acquisition. 44  |  Access to Land in South Asia: The World Bank Guidance Note Nepal Bhaktaphur. Mika Törhönen 3. Land Assembly  |  45 The private sector has access to a variety of devices to can be used to service and pay off the debt borrowed to minimize risk. They include: finance the project. „„ Offering landowners an equity stake in the completed development rather than buying the 3.6 Conclusion land outright. The public and private sectors have a range of methods „„ Making payments for land in tranches when at their disposal to assemble sites for development revenue is realized. purposes. But whatever method they use, it is „„ Securing options to purchase land so that absolutely vital to be able to identify the owners of the it does not actually have to be bought until land and who holds any other property rights over it, there is certainty that the entire site can be such as use or access rights. Site assembly requires assembled. If the project cannot go ahead, then there to be a system in place that enables prospective developers merely lose the cost of buying the owners to identify rights holders and to enable them options or a break fee. to defend their ownership once the rights have been „„ Renegotiating planning consents and acquired. developer contributions to infrastructure on This is not the case in many parts of the South Asia grounds of financial viability. Region. Land registers and cadasters are incomplete „„ Putting projects on hold until more favorable and out of date, and therefore cannot provide the circumstances arise. necessary degree of certainty. This means that the cost This means that if site assembly proves too challenging of defending land claims, resolving overlapping and or expensive, developers can minimize their losses. competing claims to land, and the time this will take to Where the public sector is involved in partnership or accomplish have to be factored into any infrastructure other collaborative arrangements with developers for project. If land records cannot be relied upon, then the provision of infrastructure, those managing the part of an infrastructure project may have to be the projects should be aware of how private sector partners systematic registration of land and property rights in can minimize their risks and may be able to walk away the affected area before construction can commence. from projects that cease to be viable or prove to be too The private and public sectors vary greatly in their difficult to realize. ability to walk away from a project that proves not to Private developers expect their projects to generate be viable. Private developers can walk away from a sufficient revenue to meet the costs of development, scheme that proves too difficult to undertake often plus generate a profit for themselves. In many with only modest losses, particularly if land was infrastructure projects, however, this is not the case. It acquired using options or the development was falls to authorities to step in and develop governance funded by debt finance. Governments, however, only structures that assist in the financing of major move forward with infrastructure investments after a development projects. For instance, transport projects, political process to ensure that the project has public such as railway improvements or mass transit, are buy-in. They cannot readily back down and abandon typically too expensive to be financed just from fares a scheme should it head into difficulties, and thus it or tolls on users alone. But they also tend to generate is vital that these projects are thoroughly evaluated significant benefits for non-users in the form of time before the public sector commits to them. In particular, savings through reduced congestion. The public sector public authorities will need to satisfy themselves that has the ability to capture the value added to properties they can assemble the site for the development, which resulting from improved accessibility through devices requires the creation and maintenance of accurate land such as property taxes and developer charges, which registers and records. 46  |  Access to Land in South Asia: The World Bank Guidance Note 4 Improving Access to Public Lands 4. Improving Access to Public Lands 4.1 Rationale for Improving Access much needed land for public infrastructure projects, or raise resources via monetization? Public purposes to Public Lands can include food and energy security, landscape D espite the recognition that public land and buildings management, and protection of ecosystems, climate represent some of the most valuable public assets, change mitigation, and disaster risk management, or they are systematically underutilized in most SAR affordable housing or jobs and growth, and the list countries. Most developing countries need significant continues. investment in basic public services. These investments Investing in better access to state and public lands for require land, particularly when it comes to urban development has enormous potential for providing expansion, housing, transport, and climate mitigation, an impetus for accelerated growth, diversification of like RE projects. Simultaneously, in many cases, land the economy, and increased public revenues. It could and building assets in the hands of a ministry or thus have a major impact on sustainable urbanization, department have a highest and best use value greater improvements in living space, and poverty reduction, than their current use value. This raises the question: while also generating critically needed resources Can some of these public lands and building assets be for financing infrastructure investments and climate used for a public purpose with higher value, provide actions. However, there has been little progress in Public land inventories in India Reforms to catalogue government-owned lands are underway While most public lands and properties have been recorded in the Records of Rights or Cadastral Maps, very often the data has not been digitized or standardized. It is also often out of date. An area bases query of available public lands for a public purpose tends to lead to information that does not correspond with the reality on the ground, as most informal occupancy of land in the region takes place in state and public lands. In response, the Ministry of Electronics and Information, the Ministry of Urban Development, and the Land & Development Office (LDO) of the Union Territory of Delhi have established the Government-Land Information System (GLIS) as a centralized repository of government lands in India. While a good start, GLIS content does not provide comprehensive data on public lands and assets, in terms of covering all or the majority of Public Sector Undertakings (PSUs), Central Public Sector Enterprises (CPSEs), and Ministries, and their land and building assets. GLIS also does not include information on asset values either as a dynamic or static function. Instead, it is updated on a self-declaration and interest basis with loose standards and formats, the data is not verified externally at entry, and continued updating is not pursued. Other efforts to catalogue India’s public lands and properties are underway. Tamil Nadu State is also working on a Government Land Management System (GLMS) that attempts to create a comprehensive and up to date inventory of state and public lands. India’s Cabinet also recently announced the creation of National Land Monetization Corporation (NMLC) to promote the utilization of surplus public lands and properties for offsetting the public deficit and enabling public asset leveraging in urban and infrastructure development. 4. Improving Access to Public Lands  |  49 completing records on state and public lands, with Investment properties generate income from rents, the result that encroachment and unauthorized premiums, fees, and other charges to supplement construction regularly occur or valuable assets sit revenue from taxation. As with any portfolio, idle or underused. Poor land records and ineffective governments need to consider the optimum time to reporting, monitoring, and management of public lands exit from an investment and ensure that its portfolio are a region-wide bottleneck to reaping the full benefits is balanced and diversified. Trust properties are from public lands. vested in governments so that they can preserve and maintain them on behalf of current and future Governments should have an overarching rationale for generations. They provide few opportunities for managing public lands and buildings. Owning assets monetization beyond charging admission fees or comes with costs and responsibilities and, at times, generating revenue from catering and gift shops. The disposal of underperforming assets to the private main scope for monetization and for releasing public market is a better option than holding on to them. On land for infrastructure investment lies with operational the other hand, several decades of government policies properties. This means identifying assets which do not of disposing assets have made clear that monetization fulfil a core function for the delivery of public services of assets for immediate gain is not always in the public or are under-utilized. interest. Surplus public lands should be considered for alternate public use and assessed strategically for Governments tend to accumulate stocks of non-core, future uses. Public land and building asset management surplus, or under-utilized assets over time. Public needs to balance these competing objectives and services and the methods of delivering them change implications of land policy decisions and actions. over time, resulting in some assets becoming redundant or losing their value. Unless users are charged the The public sector is not a monolithic institution, opportunity cost of using them and encouraged to complicating matters further. It comprises a mosaic of divest themselves of such assets, public bodies are different public bodies, including national, regional, likely to hang on to them long after the rationale for and local governing bodies. Conflicts and competition holding them has ceased. It is therefore important to can exist between different tiers of government and have a policy that sets out what land and assets should various public bodies, including rival claims by different be owned, and which should be made available for institutions to surplus public lands. This complicates alternate uses or disposal. When developing such a the development of policy to encourage the release policy, governments should recognize that they may of surplus, under-utilized, and non-core land and not have exclusive ownership over all public lands. buildings for other uses, as delicate negotiations and In particular, others may have rights of residence, compromises may be required before the value of access, or use by virtue of long usage or custom. assets can be released. This can particularly occur where forest lands have been designated as state land. Amongst the groups especially vulnerable to the loss of livelihoods when 4.2 Functions of Public Lands and the state seeks to exert exclusive ownership rights Building Assets over state lands that have been used by others are indigenous and tribal communities. The state should Governments require land and building assets to compensate such persons for their losses if it seeks to fulfil three core functions: to deliver public services, extinguish them prior to sale. to generate income, and to preserve lands for the community by holding them in trust. When they become Such policies should be linked to asset standards for surplus to these requirements or are deemed obsolete, delivery of public services, such as ones covering space they can be repurposed or disposed of. requirements, cost, quality, location. Alternative uses 50  |  Access to Land in South Asia: The World Bank Guidance Note „„ Governments establish criteria for holding public land and building Landholding Policy assets and a strategy for disposing of non-core assets. „„ Central repository containing accurate and up-to-date information Public Land Inventory on public lands. Property Portfolio „„ Manage the acquisition and disposal of public lands, efforts to Management maximize land values and optimize day-to-day operations. „„ Require users to pay the opportunity cost of using state-owned Recovering Asset Cost lands as a disincentive for retaining surplus land. include transport and other infrastructure, RE, and by public authorities, but also applies to assets affordable housing. owned for investment purposes and ones held in trust. 4.3 The Cornerstones of Good There are circumstances when the ownership of assets is prudent, such as when there are Public Land and Building Asset security concerns, rents are expected to rise, or Management to ensure stability of supply. There are others when ownership of assets by a government may International experience shows that there are four not be sensible, such as when services are going aspects to effective management of public real estate through a rapid period of change in which assets assets: are likely to become obsolete. Governments can (i) Establishing a Landholding Policy: Governments in many cases rent the assets they need for the should adopt a policy in which they identify the delivery of public services, and so are not obliged circumstances in which they will own land and to own them in all cases. building assets, and why. Such a policy is vital if South Asian countries should consider following public lands are to be released for infrastructure international trends by adopting the policy that investment rather than being retained for public entities are only allowed to hold public their current use, which in some cases can properties for providing a public service, or where be unproductive. This policy is particularly the public ownership of an asset is the most important in the case of operational assets that effective way of delivering public benefits. The are used for the delivery of goods and services landholding policy should: 4. Improving Access to Public Lands  |  51 Deeds register records in Peshawar, Pakistan. Mika Törhönen vv Establish criteria for holding public land and the management of public lands, they require building assets; accurate and up-to-date information about the lands and assets they own or control. Countries vv Require custodians of public lands to report their assets, their value, and use as part of with comprehensive and reliable land registries, the annual financial reporting; cadaster records and maps, and an efficient valuation infrastructure can use these tools vv End free or nominal costs of holding to create efficient public land and property public lands and properties by selective management systems. introduction of responsibility for the costs of the assets and return on asset value For countries that do not possess these tools, a targets or internal rents for public assets and “Land Information System” as the centralized buildings; repository of government lands should be built to hold comprehensive information on public vv Enhance incentives for custodians of public land and building assets. A government needs land to dispose of non-core assets by selective information about what its assets are, how they introduction of monetization benefit sharing are currently being used, the terms and conditions and compensation schemes; and and any restrictions over their use or disposal, vv Define a pathway for alternative public use or and any plans for their future use. Self-declaration monetization of non-core and under-utilized can be a short-term interim measure while proper assets. land records and cadasters are developed. (ii) Inventory of Public Lands and Building Assets: (iii) Management of Property Portfolio: The efficient If governments are to become more efficient in management of a property portfolio requires 52  |  Access to Land in South Asia: The World Bank Guidance Note three principal functions. First, a portfolio determine whether or when it is to be disposed of. manager who is responsible for acquisitions This often can be neglected, or else it is assumed and disposals and how the portfolio is funded, that it can be carried out by the public body using including the dividends that can be paid to the asset. The tools available to asset managers owners. This function could be carried out by a are the terms and conditions under which the ministry of finance. It requires the development asset is made available to users, the selection of procedures to ensure that a proper business of users, investment in asset enhancement, case is produced before the acquisition or and redevelopment or repurposing of an asset. redevelopment of assets and that these are Using these tools can mean that the interests of evaluated using appropriate investment appraisal the government are not necessarily the same as and risk assessment methods. There also needs the agency, ministry, or other public body that to be financial appraisal procedures since projects occupies it. For this reason, some governments, can be financed using unconventional methods, such as the United Kingdom, have created a body such as Public Private Partnerships. that undertakes the functions of an asset manager Second, an asset manager who is responsible for and acts as the in-house landlord responsible for maximizing the value of the asset but does not leasing assets to public sector occupiers. Deeds register records in Peshawar, Pakistan. Mika Törhönen 4. Improving Access to Public Lands  |  53 Public lands in Pakistan’s Khyber Pakhtunkhwa Province Developing mechanisms to identify and manage a key asset Pakistan’s Khyber Pakhtunkhwa (KP) Province is currently seeking to implement policies and create institutions that will enable the efficient management of public land and building assets. The provincial capital of Peshawar is home to some of the country’s most expensive land parcels and real estate, some of which are state-owned. However, these lands are often vacant, under-utilized, or encroached upon - and in other cases, over-utilized. The lack of clear policies, use standards, or reporting on land means that the government has no way to know about these cases. Furthermore, even when public land and building assets are identified, there are no mechanisms in place to make them available for alternative public uses or monetization. The KP revenue records are partly digitized and not centralized; as a result, authorities do not have access to an up-to-date inventory of public properties. Operational and financial reporting on public assets does not cover this gap. As there is no effective way for the government to know the value, status, and utilization of its property assets, it needs to rely on the acquisition of private lands and assets for development. This process is known for complications and litigation, and risks creating undue burdens on the government – particularly when it may already hold public assets that could be utilized at a lower cost. There is an increasing recognition within the government of the importance of improving public lands and assets management. Authorities have launched a sectoral needs assessment and action planning work that will aim to implement policies, inventory, performance and reporting standards, management, and monetization of public lands and buildings in the province. There is also a need to unlock access to land for private sector participation and province-wide infrastructure activities. If these reforms are successful, they could lead to similar progress in Sindh and Baluchistan provinces. Peshawar, Pakistan, land records service center surroundings. Federico Barra 54  |  Access to Land in South Asia: The World Bank Guidance Note Preventing Corruption in the Monetization Process in Bodenverwertungs-und–verwaltungs GmbH (BVVG), Germany After the reunification of Germany in 1990, there was a need to transform the ownership structure of agricultural and forest land in the former Democratic German Republic (GDR or East Germany). Collective farms needed to be dismantled and claims for the restitution of property expropriated by the GDR addressed. New laws were introduced governing restitution, the allocation of land, and privatization. In 1992 the BVVG was established as the implementing agency responsible for managing all former State-owned agricultural and forestry land until a concrete privatization or restitution decision could be made and the sale of land that was not expected to be privatized or restituted to former owners. As a State agency, BVVG had to follow the Federal Government Directive Concerning the Prevention of Corruption, but it also introduced its own policies. yy An organizational manual for employees, that defined the main tasks, procedures, processes, and responsibilities. yy Staff rotation with teams moving on to other administrative districts/ regions in order to prevent the formation of non-transparent networks. yy Awarding of public contracts to third parties. The planning, awarding, and settlement within a procurement process were separated from organizational or personnel measures in order to prevent price collusion or other actions that could involve corruption. yy Staff awareness and education. Contracts of employment expressly stated that every form of corruption was forbidden and all employees were informed that the Guideline on Accepting Rewards and Gifts by Government Employees of the Federal Government applied to them. yy Internal auditing/full-time investigators. Where there was suspicion of corruption, this was first investigated internally by the Internal Audit Department. Once the results of the (internal) pre-investigation process were known, the BVVG board of management had to decide on further measures, including the possible involvement of public prosecutors. Many countries also make use of whistleblower protection policies to encourage the reporting of wrong-doing with protection for those reporting it. Third, property or facilities management can be One of the key problems that the management of undertaken by the occupier if supervised by the public assets must address is the potential for corrupt asset manager. This involves dealing with day-to- practices to creep in. These can take a number of day operations such cleaning, security, repairs and forms including in the award of contracts for managing maintenance, car parking, refuse collection, and public assets. The assets of central, regional, and relations with local government and neighboring local governments are vulnerable to encroachment, owners and occupiers. particularly if they are not delineated from privately- owned assets and proper registers of public assets are (iv) Cost Recovery from Users: Countries that make not maintained. The resources given to the protection the most efficient use of state-owned land and of public assets can be inadequate with irregular buildings require their users to pay the cost of inspections and checks being made on them and asset using them. This helps to ensure that there is a disincentive for public bodies to retain surplus, management departments lacking trained personnel under-utilized, and non-core assets. This can and equipment, such as vehicles, to perform their tasks take the form of a fair rent or fees that reflect the adequately. Sales and leasing of land and buildings market value of using the land and buildings. For provides opportunities for corruption, including state-owned enterprises, the charge may take the buyers’ rings to artificially lower prices in auctions form of a dividend to taxpayers as a percentage of and tenders, the sale or leasing of assets to favored the capital employed. parties at less than their market price, and exchanges 4. Improving Access to Public Lands  |  55 India’s Rail Land Development Authority How India finds commercial uses for vacant railway lands The Indian Railways is one of the largest owners of Central Government lands in India. It administers 4.77 lakh hectares of land, with the primary objective of expanding the country’s railway infrastructure. However, not all lands can be deployed immediately. Allowing them to lay vacant results in costs for maintenance and security costs, and an opportunity cost from not commercializing them, both of which are ultimately borne by the public. This violates the principle of efficient employment of public resources and is counterproductive for a government seeking to maximize public good. Therefore, the Indian Government created the Rail Land Development Authority (RLDA) in 2006, giving it a mandate to develop railway land for commercial use for the purpose of generating non-tariff revenues. The Authority is obliged to prepare such schemes and execute works in accordance with the International Building Code or the National Building Code and must keep in mind safety, aesthetics, user amenities, local master plans and the surrounding development in its work. The Central Government, represented by the Railway Board, entrusts the Authority with the responsibility of developing railway land and air space in accordance with Section 4(D)(2) of the 1989 Railways Act. There are two ways that such sites are identified. First, the Zonal Railways identify parcels of land which they do not intend to use for operational purposes in the foreseeable future and furnishes information on such lands to the Railway Board for further consideration. Second, the RLDA identifies such land parcels in consultation with the Central Government. The Authority cannot take up commercial development of any railway land or air space unless such land is specifically entrusted to it by the Railway Board. RLDA monetizes lands by way of leasing. Vacant lands can either be leased out to private developers for 45, 60, or 90 years for an Upfront Lease Premium through a competitive bidding process or be self-developed or jointly developed with private developers and then leased out. RLDA may carry out ancillary work such as the construction of boundary walls, removal of existing railway structures, or the construction of rehabilitation works to enhance the value of land before bidding it out. In the case of joint or self-development, leases may be granted to developers who bear the cost of development of land, or RLDA may develop built-up area at its own cost and then lease them out. The RLDA can carry out re-development of railway stations and colonies through special purpose vehicles (SPVs), joint ventures (JVs) or other legal entities with the approval of the Central Government. RLDA can also form a partnership with a developer, settling on a revenue-sharing or development-sharing agreement or equity partnership in an SPV or any other form. of assets for inferior ones. Public bodies need to have management of land and building assets. These tools in place robust anti-corruption measures to guard were often developed in businesses like retailers and against these. banks that, like the public sector, have large numbers of properties and need to rationalize them in the face of changing patterns of customer usage. The tools they 4.4 Public Land Management developed enable them to identify under-performing Institutions branches and properties for which the long-term prospects for usage are limited. The management of surplus public land and non- core assets require special competencies in real The monetization of public lands has typically estate and valuation that are not always present in required the creation of an institution that is able to ministries or departments. There are examples, such attract people with relevant real estate skills and to as Land Use Victoria in Australia and the Government remunerate them at the market rate. This can take Property Agency in the United Kingdom, of public land the form of a government-owned company or special management departments that make use of tools purpose vehicle (SPV), as in the case of Canada or commonly found in the private sector for the efficient South Korea. The government, as the owner of a 56  |  Access to Land in South Asia: The World Bank Guidance Note Good corporate governance for public land management agencies Why operational independence is essential Operational independence is vital for any statal or parastatal public land management agency specialized in monetization of assets. Operational independence allows for professional management and the ability to recruit personnel for skills and competencies based on business acumen, rather than the often restrictive civil service human resources (HR) policies, and the public sector’s renumeration restrictions. The other side of the coin is the state’s ability to undertake owner oversight. Appropriate public corporation governance arrangements have clear lines of separation between owner oversight and executive powers. This is in the interests of both the owner and the company management. Public authorities benefit from the company being operationally independent, as it protects them from being held directly accountable for the company’s actions and coming under pressure to intervene, at a cost to the company’s ability to deliver financial and social benefits. For the company management, operational independence provides them with the ability to operate the company as business to the best of their managerial and technical ability. The company can still be subjected to a level of external scrutiny that can help curtail corruption. land and building asset holding company, must have 4.5 Leveraging the Value of a clear understanding of the purpose it is seeking to achieve and set targets for performance for this Public Land type of institution. For the company to fulfil its role, Leveraging public real estate occurs when a government it also must be granted operational independence transfers publicly owned property at reduced or no for implementing its business and adhere to global cost to a private developer for economic development standards of governance and transparency. purposes, or to achieve some other policy goal. This Such a public company or SPV needs to have a legal applies to property that is not needed for public use. persona so that it can buy, sell, and lease property, It could be a large site, such as a defunct rail yard or to sue and be sued, to enter into contracts, and to decommissioned military base, or a smaller site, such contract debts and borrow funds. It may also be as a closed school or office building. able to raise funds in the form of loans and financial The market value of real property is the highest and contributions from joint venture partners. These best use of the asset given existing legal, physical, powers are needed if it is to realize the current value and regulatory constraints rather than the value of its of surplus or non-core assets. Before public lands can current use for a public purpose. A government may realize their investment potential, it may be necessary determine that there are non-market uses or policy to clean up pollution, resolve defective titles, carry objectives that are desirable to fulfil with the land, out re-parcellation, install infrastructure, and develop such as the creation of public spaces, food security, master plans – all these steps will require the company climate change mitigation, or the mandatory inclusion to be able to expend significant resources. These types of “affordable” housing units within a residential of companies or SPVs have also been used by some development. If such requirements are imposed, these governments to carry out infrastructure projects, encumbrances may decrease the market value of the such as the construction of high-speed railway lines. development site, but governments need to be mindful As land adjacent to infrastructure investments, that they should act in the interests of their citizens particularly transport undertakings, is likely to and not take an exclusively commercial approach to increase in value, this can provide opportunities for surplus assets. Governments have to navigate a path the state to realize its potential through development between potentially conflicting objectives, of which or asset enhancement. the need to raise money from surplus assets is one. 4. Improving Access to Public Lands  |  57 Government land management in Tamil Nadu, India Developing a system to unlock sustainable infrastructure and attract private sector financing Land acquisition constraints are among the primary causes for delays and cost overruns in implementation of infrastructure projects in India and represent a significant factor disincentivizing private capital flows. The government is the country’s largest owner of land and properties, many of which remain vacant or under-utilized. Accessing these public lands, typically found in congested and expanding urban and peri-urban areas, is critical for the implementation of sustainable and climate resilient infrastructure projects and attracting private sector financing and partnerships. The development of an approach to unlocking and leveraging public lands at scale is therefore required in all or most Indian states. The State of Tamil Nadu has begun developing a Government Land Management System (GLMS) that will build on the records of the Department of Revenue and the Department of Housing and Urban Development. The GLMS aims to provide a comprehensive record and mapping of all government lands in Tamil Nadu identified by location, fixtures, use and custodianship. It will improve land availability with clean titles, reduce land costs, and increase private investments in housing infrastructure, and strengthen the government’s capacity to leverage public land assets for development objectives. The GLMS will include a systematic, state-wide geospatial and title inventory of publicly owned lands, resulting in an ability to screen potential sites for housing projects online. As earlier demonstrated under the Rajiv Awas Yojna (RAY) housing initiative, unlocking public lands and their values has immense potential for generating public private partnerships (PPPs) in housing. On this front, the GLMS’s impact promises to be two-fold: First, it will make lands available for affordable housing programs by providing public and private developers with certainty about land and property rights. This in turn will allow the state to leverage public asset values for Joint Ventures and other business deals for urban development. Transactions can take the form of sales, auctions, „„ Have the technical capacity, business skills, leases, or any other conveyance that sees the rights and and authority to negotiate with private real entitlements to publicly owned property transferred estate developers regarding these issues. in exchange for fiscal benefits or the delivery of some public good. It is also possible to enhance the value of 4.6 Conclusion private properties by, for example, strategically locating government buildings and functions or using them to There is an increasing realization that, in most anchor new developments. One of the tools of regional countries, land and buildings are the most valuable economic policies has been to disperse government assets governments hold. However, they are often not operations to areas of high unemployment. To leverage being used to their full potential. Land and building the value of public real estate effectively, a municipality assets are required by governments to fulfil three or government entity must: primary functions: deliver public services, generate income to support public expenditure, and holding „„ Be able to calculate and understand the market trust properties to preserve and maintain them on value of its property portfolio; behalf of current and future generations. In order „„ Understand the cost of additional infrastructure to make effective use of public lands and property, that may be required to unlock a site’s market governments should repurpose or dispose of surplus, value; under-utilized, and non-core assets – including taking „„ Articulate, as precisely as possible, the policy steps to make the land available for infrastructure goal(s) it is trying to achieve; investment and other public purposes, such as climate „„ Understand the likely cost to developers of change mitigation, disaster risk management, and meeting such policy goal(s); protection of the environment. „„ Be able to estimate the residual land value of Governments should establish an overarching publicly owned sites; and rationale for managing public lands and buildings 58  |  Access to Land in South Asia: The World Bank Guidance Note and the policies that require such assets to be in and building asset inventory which has up-to date government hands. Globally, countries have made information on all public assets; and (iii) require state considerable progress in developing models for users to pay the cost of using land assets to minimize managing public assets. There is an increasing the perverse incentive of retaining assets they no appreciation that owning public assets has costs and longer need or are not being used efficiently. responsibilities attached to them. In addition, public The skills needed to efficiently manage land and lands and building assets may have a highest and building assets are not traditionally found in best use value greater than their current use value. If governments. Accordingly, the State must create an no longer required for a public purpose, these could enabling environment for a transparent and efficient be disposed of to realize their value or be redeveloped public land and building management system through for ongoing revenue generation. Alternatively, they legislation, regulations, and capacity building. could be repurposed to satisfy a higher value public Countries that have successfully pursued policies policy objective. to enhance the efficiency with which government The building blocks towards a good public land and assets are used and managed and to realize the building management system are (i) establishing a maximum value from the disposal of surplus assets landholding policy in which governments identify have often had to create a specialized institution that the circumstances in which public entities can own is able to recruit and remunerate employees with the land and building assets and why; (ii) creating a land requisite skills. A solar park in Bangladesh. Zaheen Ibn Abedin 4. Improving Access to Public Lands  |  59 5 Compulsory Acquisition 5. Compulsory Acquisition 5.1 Defining Compulsory Acquisition a project. There should be no discrimination against any group in the award of compensation. This requires T he typical means of compulsory acquisition is compulsory purchase, but it can also take many other forms. These include coerced donations, forced that there should be accurate and reliable land records as a precondition for fair and equitable compulsory acquisition. Success in defining just compensation land pooling, forcing people to accept easements levels depends on the quality of land valuation over their land, causing the value of land not taken to infrastructure in the country and the transparency of diminish, and changing rights and consents24. Many property market. These prerequisites are often lacking of the ways in which sites are assembled for the in the South Asia region, causing delays and litigation purposes of infrastructure investment require a form of in infrastructure investments. compulsory acquisition in order to prevent a situation in which a small number of owners can block an The assets taken through compulsory acquisition can infrastructure project by refusing to sell at any price or be tangible, such as land and buildings. They can also holding out for a monopoly price. Even when acquisition be intangible, covering all types of rights. It does not is negotiated, having compulsory acquisition powers in just affect owners of land but anyone who has any type reserve ensures that a project cannot be blocked. of right over land, buildings, or other assets, including tenancies, occupation, use, access, or subsurface or air However, having these powers is of little value rights. Compulsory acquisition does not even have to unless a government can identify those who possess result in a person being deprived of the asset: They may property rights that have to be acquired. The rights in simply be deprived of some of the rights they previously question are not just ownership rights but also rights enjoyed or for their livelihoods to be reduced, or that of roam, use, access, and residence. Affected persons the investment causes harm to them, for example, in include anyone who suffers permanent or temporary the form of dust or noise. The rights of which a person is displacement or loss or diminution of rights or assets deprived also do not have to be formalized: compulsory and not just owners of land. They include tenants, those acquisition can apply to unregistered and customary with access, residential, use, or customary rights, those rights, and to informal property assets. FAO’s Voluntary with leases or licenses, squatters, those with tribal or Guidelines on Responsible Governance of Tenure25 indigenous rights to stay, graze or use, and those with calls for countries to recognize all legitimate forms of rights that have been established through long usage land use and occupancy, not only legally registered over time. They can also include those with rights over rights on land. Land acquisition that recognizes and neighboring properties which are adversely affected by compensates only tangible and legal property assets 24 Compulsory acquisition is defined by the World Bank in ESF5. can harm the poorest segment of the population and is World Bank. (2018). Environmental & Social Framework for IPF bound to cause civil unrest. Operations - ESS5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement – Guidance for Borrowers, The World 25 FAO. (2012). Voluntary Guidelines on the Responsible Governance of Bank, Washington DC. Retrieved from https://thedocs.worldbank. Tenure of Land, Forests and Fisheries in the Context of National Food org/en/doc/796881511809516397-0290022017/original/ Security, Food and Agriculture Organization of the United Nations, EnvironmentalSocialStandardESS5FactSheetWBESF.pdf 2012, Rome. Retrieved from https://www.fao.org/3/i2801e/i2801e.pdf. 5. Compulsory Acquisition  |  63 Sewer Shop in a Jamalpur island in Bangladesh considered for RE investments. Mika Törhönen 64  |  Access to Land in South Asia: The World Bank Guidance Note 5.2 Justification for Compulsory adversely affected by a project, for instance by noise or pollution. The project should not be Acquisition designed in such a way as to transfer wealth Compulsory acquisition is contrary to the fundamental from one group (the affected persons) to another (the project beneficiaries). principle of market economies that transactions should be between willing buyers and willing sellers acting in their own best self-interest. However, it can be 5.3 Key Requirements for justified if: Compulsory Acquisition „„ It is in the public interest: Usually this is Compulsory acquisition requires diligent checks to defined by legislation but is likely to include the identify all those affected and the extent of their construction of certain types of infrastructure losses, and not just owners of land and buildings. networks or corridors. Legislation may Compensation should enable those affected to be also justify compulsory acquisition as being acceptable on economic, social, or able to replace lost assets or rights or maintain their environmental grounds. livelihoods. The process should be accompanied by community engagement and consultation and the „„ It is a proportionate response to a problem: opportunity to challenge the legitimacy of the purpose This requirement is fulfilled if the gains from for which land and property rights are to be used. There the realization of the project compensate for should be prompt payment of compensation based losses, and there are no effective alternatives on the full value of the assets, rights, and livelihoods to compulsory acquisition, such as the redesign lost or diminished, and the ability to appeal against of the project. proposed compensation. „„ It is equitable: Affected persons must be fairly and fully compensated for their losses in a The World Bank’s Environmental and Social Framework timely manner. Affected persons are not just goes beyond most national legislation, calling for owners but anyone who has rights of use or livelihood improvement - or at minimum restoration - access and may include owners of neighboring and compensation at the replacement cost and should property rights whose enjoyment of these is be applied, irrespective of the source of funding. Key principles of ESS5 Land Acquisition, Restrictions on Use and Involuntary Resettlement yy Involuntary resettlement should be avoided or, when unavoidable, minimized. yy Those affected should have their livelihoods improved or, at the very least, restored. yy Where compulsory acquisition is unavoidable, compensation should be based on replacement costs. Acquisition can only take place once compensation has been made available. yy Where there are functioning markets, the replacement cost will be the market value established through independent and competent real estate valuations plus transaction costs. Transaction costs include administrative charges and registration or title fees. yy Where functioning markets do not exist, alternative means can be used, including the productive value of land and productive assets and the undepreciated replacement value of structures and fixed assets. yy Affected people must be resettled to places they can legally occupy and where they are protected from eviction. Tenure rights shall be no weaker than those enjoyed on the land from which they have been displaced. yy Borrowers are not permitted to resort to forced evictions of affected persons. Source: World Bank. (2018). Environmental & Social Framework for IPF Operations - ESS5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement, The World Bank, Washington DC. 5. Compulsory Acquisition  |  65 Globally, most land acquisition legislation stipulates Challenges in Establishing Title and Rights compensation at the market value of the acquired asset. The difference between market value and replacement yy Opportunistic Encroachment cost is that the latter considers each property to be yy Registries Exclude Certain Rights as valuable as the cost of building it somewhere yy Incomplete and Out-of-Date Land Records/Cadastral else. The market value of a building that costs a great Maps deal to build, but which nobody wants to buy, can be yy Poor Quality of Surveying nominal or even negative - particularly in cases where yy Sporadic Registration the building site is contaminated or building materials yy Public Avoidance of Registration contain toxic or deleterious materials. The replacement yy Deeds Registration that does Not Verify the Chain of cost for the same building, however, would still be high. Transfer Replacement value is of particular importance when looking at the value of livelihoods lost. The value to affected persons of the livelihoods lost can be much greater than the market value of assets taken. as a powerful tool to resolve questions about when encroachment occurred. 5.4 The Problems of Establishing Land record systems need to be able to record a Title and Rights multiplicity of rights over a single parcel. A registry The challenge for those undertaking infrastructure will often have a minimum quantum of rights that can investment projects is to identify all those with be registered – for instance, only leases of more than rights over land parcels who should be compensated a given duration may be capable of being registered. when their property is acquired compulsorily. Part When registries are established, certain types of rights of the problem is that there can be multiple rights, may also be excluded. For instance, guardians may occupancies, and uses on a parcel of land in existence be recorded as owners rather than minors. Custom at any one time belonging to different people. There can also influence registration practice, affecting, for can be owners, tenants for life or on different types instance, whether wives are recorded as co-owners. of leases, sharecroppers, and those with use rights, Rights do not cease to exist just because they are such as seasonal grazing or foraging. Holdings can be unregistered or cannot be registered. It is incumbent sub-divided upon inheritance, with some co-owners on those undertaking compulsory acquisition diligently working the land while others live and work elsewhere. to seek out and identify all those whose rights will be Rights of usage can also be divided so different acquired or depreciated and to compensate them for individuals possess rights that can be exercised at the their losses. This can be time-consuming and costly even same time: The owner of a structure might, for instance, when there are accurate and reliable land registers. For let out the roof space for telecommunications or solar instance, it may involve interrogating land and letting electricity generation. A government agency may also agents about tenancies and who the principals are who potentially be involved, claiming the area in question employ them, as well as fixing notices to individual is State Land. parcels, requiring individuals to register their claims Unfortunately, infrastructure investment announce- with the acquiring authority by a given date. ments can trigger opportunistic encroachment on In SAR, the historical systems of maintaining land private and public lands in the hope of attracting land records have not been elastic enough to keep pace with acquisition compensation. Satellite image companies’ development. Large areas, in particular those around repositories are a great source of information the region’s rapidly expanding cities, have fallen into regarding the history of land occupancy and can serve legal informality. A land registry ought to provide a 66  |  Access to Land in South Asia: The World Bank Guidance Note Kerala, India. Field Book. Mika Törhönen unique and reliable record of the title, rights, and of surface areas. If systematic registration was not obligations of each parcel, guaranteed by the body that applied to the whole of an area, there will be parts runs the registry. However, land records in South Asia where title is assured and other parts where it is not. have often been established in a settlement process. Similarly, sporadic registration - when registration only In systematic first registration, issues of disputed and occurs as a result of a trigger event, such as inheritance overlapping claims should be resolved so that there is or sale - can also leave areas where the land registry a unique title to each parcel. There can be subordinate has no information. The register will become out of interests in a parcel, but not overlapping or disputed date the day after systematic registration is complete claims. as, for instance, owners die, sell their property, grant rights, take out mortgages, and construct buildings. There are many reasons why land records and cadastral maps are often incomplete or out of date in areas where The main challenge of land records in the region is infrastructure investments are planned. If there is no not the quality or completeness of past surveys and cadastre that provides a geo-reference for each claim, registration. Historical records, maps and registers there can still be claims that physically overlap because in SAR were world-leading at the time they were of inaccurate boundaries. These challenges can also introduced. However, these records have often not arise if the quality of surveying is poor, resulting in been maintained properly - there have been periods of overlapping boundaries or inaccurate measurements neglect, and full surveys and register updates are often 5. Compulsory Acquisition  |  67 necessary to fix any gaps in the records. The historical Maintaining the accuracy of a land register requires revenue records in SAR were also designed to capture effective enforcement mechanisms, as well as popular the slow pace of changes of an agrarian society and willingness to comply with regulations. Citizens will cannot accommodate the rapid urbanization prevalent register their properties when they perceive that doing in the region in recent decades. Finally, citizens have so is the best way to secure their property assets, and typically found ways around registration to avoid fees that formal registration increases the asset value. If and taxes, which also reflects these societies’ low level they don’t see the utility and perceive the registration of trust in government services. agency to be corrupt and unreliable, they will not register their lands. These challenges call for infrastructure investment projects to start with land records verification and Compliance can be undermined by the cost of updating. However, this is not a common approach. registration fees and property transfer taxes, “informal” Instead, ad hoc processes, such as one-off mapping or corrupt fees and red tape, and administrative and community consultations that take place outside burdens. Citizens may be disincentivized to register the land administration realm, are often introduced their properties if they need to journey to a distant to overcome compromised land records. The problem town or fear that the information provided in with this approach is that it does not resolve the larger registration will be used to their disadvantage, issues with land records - it just results in workarounds such as by undermining their entitlement to social to manage the issue. security or subsidies or leading to higher taxes. As a Kathmandu Valley housing, Nepal. Mika Törhönen 68  |  Access to Land in South Asia: The World Bank Guidance Note The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, India The Land Acquisition Act 2013 replaces the British colonial Land Acquisition Act 1894 with the aim of providing fair compensation to those affected. Its aim is to ensure a transparent process for government bodies acquiring land, in consultation with the stakeholders and local governing bodies, with minimum displacement of the population and fair compensation to those whose land has been acquired or livelihoods affected. The acct provides for rehabilitation and resettlement schemes, which include the impact of livelihoods lost and on public services and utilities in areas where resettlement is to take place. The government can acquire land for public purposes, its own use, for public companies. Public purposes include state or national security, infrastructure, agriculture, education, housing, water conservation, and industrial corridors. If the government acquires the land for a public purpose, it can do so compulsorily without seeking consent. However, if land is acquired for private companies, then 80 percent of affected families must give their consent and if for a public private partnership, 70 percent. This distinction also has implications for the compensation payable. With land acquired for private companies and public private partnerships, compensation is by consent. If for a public purpose, then compensation is based on the market value of the land as indicated by the average of the upper half of sales of similar land. Land acquired for one purpose cannot be used for another, with the land returning to the original owner if no activity after five years. A Social Impact Assessment is to be carried out for each project, but a 2015 amendment has removed this for defense, rural infrastructure and industrial corridor schemes. The Social Impact Assessment is made after consultation with local governments. The procedure for acquisition provides for advertising of the project and a period of time for objections to be made. There are important challenges for projects undertaken under the act, particularly the identification of affected persons given the state of land records in many areas and how to determine fair compensation where there may be few market transactions or information about prices is limited, for instance, because of false price declarations made to evade stamp duty. result, transfers and transactions will be undertaken registration is that a registered deed takes precedent informally and what is in the register will, over time, over an unregistered deed. have less and less relationship to reality. These challenges cannot be resolved without persuading the The cost of registering deeds and paying stamp population that an accurate and up-to-date register duties, as well as any inefficiency or corruption in a is of value to them, particularly in helping to protect deeds registry, are all likely to encourage informal their property rights. transfers. On the other hand, deeds registration that is compulsory, interlinks with land records and land Many of the systems of land records in SAR are deeds- parcel maps, and where there is verification of the title based. Title deeds are an effective way of proving chain at registration can be very efficient and trusted. ownership providing that there is no break in the chain The underlying key is up-to-date land records and of transfer. However, many, if not most, deeds registries mapping, which are capable of reliably defining the in the region accept registration of new deeds either property object, rights, and owners for the deed of sale. blindly or with minimal verification, which does not confirm seller’s ownership. Deeds registration also remains voluntary in many jurisdictions. If a past transfer 5.5 Assessment of Compensation is challenged, then the current owner is the person Valuation plays a critical part in any project that involves who, for the moment, has the best claim. There are a the acquisition of land. Valuations are needed: variety of policies that can help reduce claims: checks „„ In the project planning phase, to estimate the before deeds are registered, a statute of limitations on likely cost of land acquisition. making claims, and stamp duties, which mandate that only stamped documents can be presented in court, „„ In the implementation phase, during are all useful steps. A common stipulation in deeds negotiations for the acquisition of land and 5. Compulsory Acquisition  |  69 Challenges in property market valuation yy There is no central marketplace. Trading takes place in many localities, and there is no unified database where prices are recorded. yy The prices declared in land registries appear a significant time after the transaction takes place or are inaccurate. yy Only a small proportion of property assets are traded in any one year, even in times when the market is booming. In periods of recession, sales are few and evidence of the sale prices is thin. For particular types of property or localities, there may be very little evidence of market prices as the properties are rarely traded. yy No two properties are identical. Even if constructed in the same way, each property has a unique location. Adjustments have to be made to allow for differences between the property being valued and a comparable one for which there is a transaction price. to assess the compensation for assets and the future once development had taken place27. rights taken and livelihoods terminated The primary problem in the property market is price or compromised in cases of compulsory acquisition. discovery. How can one ascertain the market price of a property? The prices realized in transactions are The importance of valuers and valuations comes from used to value the stock of comparable assets that have the way in which the property market functions. The not been traded. However, the property market does market value is the value of the property in its highest not always function as a classical market. Valuers, and best use, in most cases but not all, the existing through their knowledge of the transactions that have use as no other use is feasible, legally permissible, or taken place in the property market, are an invaluable as profitable. A widely accepted definition of market conduit through which price information is passed value is that adopted by the International Valuation on to buyers and sellers. They must make subjective Standards Council26. adjustments to reach a valuation for a given property, “Market Value is the estimated amount for which an asset or using known transaction prices and applying them to liability should exchange on the valuation date between a the circumstances of properties that are comparable willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted but may differ in certain respects. The qualifications, knowledgeably, prudently and without compulsion.” skills, knowledge, and experience of the valuer play a key role in determining the reliability of the valuations The highest and best use reflects any development produced. consents or permits for changes of use that have been granted but have not yet been acted upon. Since valuers are in a position in which they could It also reflects what is known as hope value - the influence the market to their own advantage, it is possibility that consent for a more profitable use important that they follow a code of ethics. That of the or redevelopment might be granted in the future. If International Valuation Standards Council contains land rights are to be acquired compulsorily, affected five fundamental principles: integrity, objectivity, persons will not be able to replace the asset taken by competence, confidentiality of information, and one that is equivalent unless the highest and best use 27 A recent study of compulsory acquisition in the Bengaluru Mysore is the basis of valuation. The affected person will be Infrastructure Corridor in India estimated that failure to compensate for the loss of hope value amounts to between 2.39 and 8.35 times deprived of the livelihood they might have enjoyed in the market value of agricultural land. Shukla, J. and Tiwari, P. (2022). “Measuring Inadequacy in Compensation for the Compulsory 26 IVSC. (2020). IVS 104 Basis of Value, International Valuation Standards Acquisition of Land: Evidence from Bengaluru, India”, Land 2022, 11, Council, London paragraph 30.1. 664, 16pp, https://doi.org/10.3390/land11050664 70  |  Access to Land in South Asia: The World Bank Guidance Note professional behavior28. In many countries, valuers new replacement today, without any deduction for are regulated in order to ensure that they pass an depreciation. The sales price of a property with an examination or obtain certification to ensure they old building in an area with low market interest, such possess the necessary qualifications and that they as in an agricultural area where the population is adhere to an appropriate ethical code. migrating to cities, can be substantially lower than the replacement cost and the income and livelihood it can Valuers should also carry out their valuations in generate. The livelihoods improvement requirement accordance with national valuation standards. Many can also lead to a higher level of compensation countries adopt one of the international systems of than the sales comparison approach to determining valuation standards, such as the International Valuation market value or replacement values of a farm in an Standards produced by the International Valuation area where farms do not trade well in the market Standards Council, as the basis for their national and the buildings are getting old. Loss of livelihoods systems. In reality, standards of valuer education and may result in higher compensation for loss of use or training vary widely between countries - as does the access rights than would be produced by the sales rigor with which adherence to valuation standards, comparison approach. ethical codes, and codes of professional practice are enforced. It is vital that valuers use an appropriate method of valuation when estimating the compensation that The definition of market value is, by necessity, an should be payable and not assume that the sales estimate. Although valuations should be based comparison method is the only legitimate approach. on objective information, they are the opinions This is particularly important in areas where there is of fallible human beings. Even when the valuer is little market activity and limited evidence from sales acting competently and with integrity, valuations are of comparable properties or use or access rights. subject to biases, such as overconfidence in decision Valuations can be produced in two ways: making, anchoring decisions on easily recalled information, and interpreting new information as (i) A human valuer inspects a property and confirming previous assumptions. Valuations should values it using the evidence drawn from recent transactions of comparable properties, therefore be open to scrutiny regarding the evidence making appropriate adjustments to reflect any and methodology used in arriving at them. This is of differences between those properties and the particular relevance in compulsory acquisition, where subject property. it should not be assumed that a valuation produced by a valuer appointed by the acquiring authority is the (ii) Mass valuation or mass appraisal is a statistical definitive value of a property right. The establishment approach to valuations, often referred to as of independent appeals mechanisms are needed in Computer Assisted Mass Appraisal. Because which estimates of compensation can be challenged of the size of the data sets, this is invariably and alternative evidence produced by claimants. undertaken using computers. Those properties for which there has been a recent transaction Defining a market value is often insufficient for are treated as a sample of the population of World Bank-funded projects where ESF applies. properties. A statistical relationship is derived As per the ESF, the compensation definition needs in which price is the dependent variable and to also consider replacement value and impact on is determined by a number of characteristics livelihoods. This means that a lost building should of the property, which form the independent be compensated at the value it takes to build a variables. These characteristics can include size, 28 IVSC. (2011). Code of Ethical Principles for Professional Valuers, age, construction, condition, and location. Once International Valuation Standards Council, London. a statistically significant relationship has been 5. Compulsory Acquisition  |  71 derived, the population of properties are valued sellers may not be accurate. This may be because those by inputting each of their independent variables involved are seeking to evade property transfer taxes in the equation. or registration fees when these are calculated as a Mass valuation is important in assessing percentage of the purchase price. Rather than declaring properties for property taxation and can also the true price paid, buyers and sellers might state that be used to estimate the cost of land acquisition the price was a plausible lower alternative, such as the in an investment project. However, it should assessment used for property taxation. never be the basis for compensation in the Not all transactions require registration. If, say, a event of compulsory acquisition other than to warehouse in a country’s main commercial city were provide a reference point for the actual detailed to be sold by one company to another, they might use compensation valuation. Mass valuation uses the device of having the property owned by a special only a limited number of characteristics of purpose vehicle (SPV). Rather than one company properties in estimating their value. It aims to buying the property from the other, the purchaser produce an approximate valuation and omits key might buy the shares in the SPV. In this case, there will factors that can determine the value of individual property rights. The difference can be significant have been no transfer of legal ownership: the property when it comes to assessing the compensation will still be owned by the SPV, but the SPV simply has due for individual assets taken or whose value a different beneficial owner. Many use and access is diminished, and livelihoods terminated or rights are never sold so that there are no prices to be compromised. There is a legitimate role for recorded even if transfers of ownership are capable of mass valuation in estimating the budget needed being registered. The price discovery process is likely for land acquisition but not for determining to involve accumulating evidence from a number of the compensation to which individual affected sources, including declared prices in land registers, persons should be entitled. registered lease prices, asking prices when properties are advertised, real estate broker records on sales, Valuations depend upon knowledge of market prices. valuations for purposes such as mortgages, the regular However, discovering transaction prices can be difficult. revaluations of investment property portfolios, and Some countries have public price registers in which information known to property agents and valuers from buyers and sellers must disclose the prices paid. Other their activities on behalf of clients, such as revenues countries regard such disclosures as a breach of privacy and costs that are typical of certain types of business so that prices paid remain secret, and either publish and usages. anonymized or indexed information on the markets, Valuers use a variety of methods when seeking to or no information at all. Land registry information is estimate the market price of a property. public in many countries, but it takes an effort for a valuer to search for market data from the registered (i) Sales or direct comparison approach: This deeds. Moreover, the prices disclosed by buyers and approach involves valuers using the prices achieved in recent sales of comparable properties to estimate the value of the subject property, after Methods of Valuation making appropriate adjustments to reflect any differences between the properties. yy Sales or Direct Comparison Approach yy Income Approach (ii) Income approach: When sales evidence does not yy Receipts & Expenditure Approach exist or is unreliable, the market rent of a property can be estimated using recent transactions of yy Cost Approach comparable properties. The market rent can then 72  |  Access to Land in South Asia: The World Bank Guidance Note be capitalized using an appropriate risk adjusted be abandoned or left unoccupied. The minimum yield to derive the property’s estimated market value must be the cost of replacing the asset value. if it should be destroyed. The method involves estimating the costs of building a new replacement (iii) Receipts and expenditure approach: This method asset, including site and ground works and is used for certain types of properties where infrastructure. A depreciation factor is applied to size is not an appropriate variable for valuation. this to allow for wear and tear and obsolescence They cannot be valued using an area unit price to arrive at a depreciated replacement cost. The such as price per square meter or per square value of the land in its existing use is then added foot. Rather, these properties are traded on their to this cost. ESF5, however, does not permit income earning potential and so are valued on deductions for depreciation, so if this method is their expected turnover or operating profits. This used to estimate the replacement value of assets, particularly applies to leisure properties such as an affected person should receive a new asset, bars, hotels, theaters, restaurants, and cinemas, such as a building, in compensation rather than but can also be applied to shops outside of the one in the same condition as that taken. retail core. In this approach, valuers estimate the revenue An acquiring authority can also expect to pay that a reasonably competent operator could disturbance and removal costs when households earn from the property. From this is deducted and businesses have to relocate in addition to the operating costs of the business, the cost of compensation for assets taken or reduced in value. capital, and reasonable profits of the operator. Those whose land or other property rights are not The balance is the amount available to pay rent taken but fall in value as a result of the infrastructure on the premises. This rent is then capitalized project, for instance due to pollution or limitations using an appropriate risk adjusted yield to derive on the use to which land can be put, should also the market value. The approach is also useful for receive compensation for their losses. Some countries estimating the replacement income needed when pay additional compensation for the fact that the properties which are never or rarely traded, such sale is not at a time of the seller’s choosing and is as farmland, use, access, or customary rights (for compulsory. There should also be compensation to instance, foraging, gathering, or grazing rights), pay for the fees of any professional advisers who the are compulsorily acquired. Compensation in such claimants need to consult in making their claims, such cases may need to take the form of investment as lawyers, valuers, and accountants. If compensation advice and training so that affected persons is delayed, further compensation should be paid for can establish alternative skills to replace the the delay, particularly if in the meantime asset values livelihoods lost. have risen so that affected persons can no longer (iv) Cost approach: If none of the other methods can obtain replacement assets in return for the agreed be used, then the cost approach, also known as compensation. the contractor’s test, is the method of last resort. It is particularly useful when valuing properties 5.6 Conclusion that are rarely, if ever, traded, such as steelworks, chemical works, ports, airports, and other forms Governments’ powers of compulsory acquisition should of infrastructure. It can also be used to estimate mean, in theory, that they ought to have few problems the market value of properties used to produce assembling sites for infrastructure projects. The reality public services that are not sold for their market can be very different, however, and land assembly price, such as schools, universities, and hospitals. in SAR is often very challenging. The processes The method assumes that if an asset is in use, it can drag on due to title disputes or litigation about must have a value to the users or else it would compensation values. Compulsory acquisition ought 5. Compulsory Acquisition  |  73 to mean that affected persons who have assets taken be a means by which the losses of assets, rights, and from them, suffer loss of property rights, or have their livelihoods of affected persons can be valued so that livelihoods diminished should receive fair and timely they can be provided with fair and timely compensation. compensation for their losses. This will enable them In many countries, the valuation infrastructure is to replace the assets, rights, or livelihoods lost with lacking: the data about transaction prices is poor, others of equivalent or greater value. national valuation standards do not match international best practices, and valuers are unqualified. Even in For this state of affairs to exist, two essential situations where the valuation infrastructure is up to preconditions are needed. First, the government or the job of identifying fair compensation for affected acquiring authority must be able to identify all those persons, the processes and systems for ensuring that who will suffer loss of assets, rights, or livelihoods as a affected persons and businesses can be relocated and result of the project. If land records, land registers, and receive timely compensation may be lacking. cadastres are incomplete or not maintained, this will be a challenge. In this situation, comprehensive registration Before funds are made available for an investment of property rights for the land needed for a project and project, task team leaders ought to satisfy themselves any areas adversely affected by it or construction works, that the borrowers/recipients actually have the capacity will need to be undertaken. Surveys will need to be to implement it. This means having the ability to identify undertaken to identify all unregistrable rights that will all the affected persons, the losses they will suffer, and be terminated or diminished so that those sustaining the means to ensure that they are fully compensated in their loss can be compensated. Second, there needs to a timely manner. Trivandrum, India. Geodetic reference mark. Mika Törhönen 6 Value Capture 6. Value Capture 6.1 The Idea and Theory of Value to contribute to the cost of such improvements. The reverse is often true, as landowners are often entitled Capture to compensation under compulsory acquisition laws or P roperty values can rise for two main reasons. They when the construction of infrastructure devalues their can increase as a result of private landowners’ property, for instance, because of noise or pollution. investment in buildings, drainage, fencing, roads, or The existence of betterment has given rise to the other improvements. In such cases, landowners invest idea that some of the increase in value resulting from their own money, and it is reasonable that they should infrastructure investment could be captured using enjoy a fair profit, as they also bear the risk that the what are known as value capture tools, and that investment will fail and they will lose their money. these contributions could play a role in funding the However, increases in property values also can result development project. from factors over which landowners have no control. For The idea that value capture is a legitimate activity has instance, the construction of a new railway line or road a long history. David Ricardo (1772–1825), a British may result in land in the vicinity rising in value as access economist, is often regarded as the father of value to it has improved, making its location more attractive capture. His argument is based on his definition of land for industry, commerce, or residence. Such increases in as being “the original and indestructible elements of value are known as betterment. Landowners have not the soil.” In other words, he believed that land was contributed to such increases in value of their property in fixed supply so that its price (rent) was determined but are the passive beneficiaries. by demand29. As a result, he argued, landowners can This raises the question of whether landowners, as the be taxed without any adverse effects on incentives beneficiaries of others’ projects, ought to be obliged to supply land. Ricardo saw landowners as the Funding London’s Elizabeth Line How Special Assessment Districts can finance public improvements The Elizabeth Line (formerly known as Crossrail) opened in 2022 and links Reading to the west of London with Shenfield and Abbey Wood in the east. Much of the line is underground. It significantly reduces journey times between the east and west of the capital as well as relieving congestion. The construction of the line has resulted in an increase in the value of properties in the areas it serves. The funding package agreed in 2020 between the Department for Transport and Transport for London was £18.8 billion. Of this, 22 per cent was to come from a supplementary business rate (annual property tax) on business premises and 14.5 per cent from community infrastructure levies on new residential properties and developer contributions. Source: https://www.crossrail.co.uk/about-us/funding 29 Ricardo, D. (1817) On the Principles of Political Economy and Taxation, John Murray, London. Retrieved from https://www.gutenberg.org/ cache/epub/33310/pg33310-images.html 6. Value Capture  |  77 beneficiaries of factors to which they do not contribute - for this purpose, depending on legal and regulatory including urban, demographic, and economic growth structures and a society’s preferences and values. and the construction of infrastructure. Not only is the They include property taxation, fees and charges, sales taxation of land neutral in its economic impact, but an of development rights, sales of leases and land, and ethical case can be made for taxing landowners as the planning and development obligations. lucky passive beneficiaries of developments created Land value capture schemes can lessen the burden by society. on the public sector by decreasing the total amount Because landowners typically supply fixed capital of public capital outlay required for infrastructure such as buildings, access roads, or fencing, Ricardo investment. Value capture instruments can be used to was obliged to invent a concept known as economic oblige those who benefit from transport investments, rent. This concept referred to rent payable just on the such as railways and mass transit systems, but who land, distinguishing it from rent payments made by do not actually travel on them, to contribute to their tenants to landowners, which includes both payment costs. Beneficiaries include non-users who enjoy for the land and the use of any fixed capital supplied time savings as a result of reduced congestion on by the landowner. This suggests that value capture other routes. These benefits cannot be monetized31 instruments need to be carefully designed so that they since non-users cannot be charged fares or tolls. fall on land betterment and not the fair profits from the However, the value to non-beneficiaries of transport supply of fixed capital. improvements can be captured from the increase in property values produced by reduced congestion and Ricardo’s ideas were taken up in the latter part of the greater accessibility. nineteenth century by an American journalist, Henry George. His book, Poverty and Progress (1879)30, Historically, there are a diverse set of ways that land argued that growth in land values was created by the value capture schemes have come about. In some community as a whole, not landowners. As a result, cases, groups of landowners have approached public he wrote, the community can tax landowners on these bodies and offered to contribute towards the costs gains “without in any way lessening the incentive to of infrastructure that would result in their property improvement.” While George’s 1866 campaign for rising in value. Governments in North America also Mayor of New York, on a platform of bringing down high encouraged investments in railway systems by giving rents in Manhattan, ended in defeat, his work has been land grants to the railway companies. The railway hugely influential. Many governments have sought, companies were able to recoup the costs of investment with varying success, to implement his ideas on land from the rise in value of the lands granted to them. value capture. When a privately funded development has adverse impacts on a community, such as causing road Ricardo and George’s writings provide the theoretical congestion, some governments require the developer and ethical basis for land value capture, but do not offer to pay for infrastructure that mitigates its impact under detailed guidance about the tools through which it can be the “polluter pays” principle. achieved. The concept broadly refers to a methodology through which incremental increases in property values Capturing future incremental value increases requires (betterment), created as a result of public investment public sector officials to have in place viable policies or regulatory action, are recouped or redirected by the and strategies to capture these increases. They also state or local governments using various incentives, taxes, or fees. A wide variety of instruments can be used 31 For a classic exposition of this problem in relation to the construction of an underground railway line in London see Foster, C.D. and 30 George, H. (1879). Poverty and Progress: An Inquiry into the Causes of Beesley, M.E. (1963) “Estimating the Social Benefit of Constructing Industrial Depressions and of Increase of Want with Increase of Wealth, an Underground Railway in London”, Journal of the Royal Statistical Doubleday, Page & Co, New York. Retrieved from https://oll-resources. Society, Series A, Vol. 126, No. 1, pp. 46-93. 52 per cent of the benefits s3.us-east-2.amazonaws.com/oll3/store/titles/328/0777_Bk.pdf were estimated to accrue to non-users. 78  |  Access to Land in South Asia: The World Bank Guidance Note Informal settlement in Pokhara, Nepal. Mika Törhönen must understand how value is created. The value of a 6.2 Value Capture Tools site may increase because infrastructure investment improves its accessibility or a change in zoning or A wide range of value capture tools exist. One development permits allows a higher value use. Value classification is according to whether they are: capture can only result in a more equitable distribution (i) Tax- or fee-based: Tax- or fee-based instruments between the public and private sectors of newly created capture land value increases through property value if public sector authorities possess appropriate taxes, registration fees, development charges, tools to capture newly created value. connection charges, infrastructure levies, betterment charges, special assessments, or tax These tools, in turn, depend on the authorities’ ability increment financing. to value property before and after the infrastructure investment or change in development permits so that (ii) Non-tax- or non-fee based, also referred to as the amount of betterment can be assessed accurately. development-based land value capture. These There is the danger that governments may overestimate instruments capture incremental value increases potential gains and discourage investment or through the sale or leasing of public land, sale underestimate them so that the public misses out on of development rights, land pooling or land the share of betterment to which it is entitled. readjustment schemes, or planning obligations. 6. Value Capture  |  79 Planning obligations, which are also sometimes increase in value, and whether there is scope for (legal) called planning gain, require developers to avoidance or (illegal) evasion of these measures. contribute to infrastructure or mitigate the impact of their developments as a condition of gaining Development-based land value capture instruments development consent. are complex. They require working out the land value increases resulting from improved accessibility and A tax is any transfer from the private sector to the agglomeration benefits from infrastructure investment public sector that is not payment for goods or services or changes in development permits, which often or a loan transaction. If the public sector charges an depend on the real estate market conditions. Some of amount for a service that is in excess of the costs of the instruments are levied before developments take provision, the excess is effectively a tax, even though place and are therefore based on projected increases in it may be called a fee or a charge. Thus, a registration value. Developers often have the potential to negotiate fee levied on transfers of ownership that is higher the charges. than the administrative cost of registration is really a property transfer tax under a different name. Similarly, This means that public bodies need considerable a development connection fee for utilities that is in technical expertise, especially in property valuation, excess of the costs of making the connection is really a to assess the value of what developers can be made development tax. These excess charges are sometimes to offer without rendering the project unviable. explicitly described as a contribution towards funding Developers are likely to plead that projects are unviable infrastructure from betterment, as with a community in order to reduce charges, irrespective of whether this infrastructure tariff, while in other cases it is levied by is or is not the case. Public bodies also need to possess stealth. Tax- and fee- based instruments are levied at good negotiating skills, particularly as they are up a set tariff so that the obligations of landowners and against experienced commercial managers. Successful developers are explicit, while other levies may be implementation depends on market conditions and the variable or open to negotiation. Their success depends extent to which what developers can offer meets the on how well these instruments capture the actual needs of each community. Table 6.1: Common Land Value Capture Instruments Instrument Description Tax or fee-based Property taxes •  Taxes levied on estimated value or increase in value of land or land and buildings. Taxes can be recurrent (usually levied annually, or sporadic (levied, for instance, when •   property is sold). •  Revenues can go into municipal budgets or to the national government. Betterment charges and  axes imposed on property owners who benefit directly from specific public investments. •  T special assessments The taxed amount is based on the estimated value of benefits generated and could fund •   new infrastructure or service the debt incurred in the building of existing infrastructure investments. A special assessment is when a supplementary property tax is levied on a specific group •   of property owners who are believed to benefit from an investment. Fees and levies  registration fee is charged by land registries to register property transfers in excess of •  A the cost of registration. Bodies responsible for spatial planning and construction approvals charge development •   application fees in excess of processing costs to those who apply for their services. 80  |  Access to Land in South Asia: The World Bank Guidance Note Instrument Description  evelopers pay fees to connect their developments to utility services in excess of costs of •  D connections. Infrastructure levies charge developers on a per dwelling or per square meter basis to •   fund the construction of improvements necessitated by their development. Tax increment financing  surtax on properties within an area that will be redeveloped by public investment •  A financed by municipal bonds secured against the anticipated increase in property value and other taxes. Planning obligations or  evelopers are obliged to contribute land, financing, or construct infrastructure as a •  D planning gain condition of obtaining development consent or to offset congestion or other adverse consequences caused by their developments. Planning obligations can include requirements on private residential developers to •   provide social or affordable housing. Development based Disposal of public lands  overnments sell or lease land that has seen its value increase as a result of infrastructure •  G through sale or ground- investment or regulatory change in return for an up-front payment or premium, leasehold lease charge and/or annual land rent payments from developers. The terms of the lease often include the potential for claw back if the developer’s profit is •   greater than anticipated. Joint development  n agreement in which the public and private sectors partner in a development. •  A Public agencies usually contribute land and the private sector contributes capital and •   expertise. The public and private sectors share the profits resulting from any increase in value. •   Land pooling/  andowners pool their land and contribute a portion of their land for sale to raise funds to •  L readjustment partially defray public infrastructure development costs. Sale of development  overnments sell development rights in excess of the limits specified in land use or •  G rights zoning regulations to raise funds to finance public infrastructure and services. Developers who contribute to the financing of infrastructure or advance another of the •   government’s policy goals may receive transferrable development rights which can be exercised in other areas. Source: The table was adapted with amendments from Suzuki, H. and Murakami, J., Hong, Y-H, and Tamayose, B. (2015), Financing Transit- Oriented Development with Land values: Adapting Land Value Capture in Developing Countries, The World Bank, Washington DC. Retrieved from https://openknowledge.worldbank.org/entities/publication/05331a70-10cd-5605-9b61-0ed80a555903 i. Tax-or fee-based instruments of them are not based on market value but on size, though this is often modified by certain characteristics (a) Property taxes of the property. If levied on market values and regularly There are a wide variety of property taxes that can be revalued, then annual taxes can capture increases used to capture value. Some make use of the types of in value that result from infrastructure investments taxes that most countries routinely levy, while others or changes in development permits. If levied on any require the establishment of new taxes. If they are to other basis, they cannot. Second, assessments must capture value increases, however, two elements need be regularly revalued to reflect current market values. to be present. First, the taxes have to be levied on the If assessments are regularly revalued based on market market value of the property. Although annual property value, most properties will not have changed physically taxes are widely used throughout the world, most to any material extent between assessments. Therefore, 6. Value Capture  |  81 Rural urban conversion in Dhulikhel - Kavre, Nepal. Mika Törhönen increases in value will reflect economic, demographic, require a trigger event to generate tax liability. Stamp and urban growth, or infrastructure investment. duty, a significant source of revenue across South Asia, is one way of levying a property transfer tax: The stamp The effectiveness of annual property taxes depends on must be bought from the government or the document the quality of property valuation. This in turn depends confirming that the sales contract has no legal upon the quality of the valuation infrastructure, validity. A capital gains tax is levied on the difference including valuation standards and the education and between the purchase and sales prices, typically with integrity of valuers, and how transparent the property allowances for any expenditure undertaken to enhance market is and whether information about transaction the value of the property and perhaps with allowance prices is readily available. Finally, annual property for inflation. taxes risk posing a liquidity challenge for taxpayers: They may be wealthier as a result of value increases, There are two key differences between recurrent and but if the tax is set at too high a level, they may find it sporadic taxes. First, sporadic taxes are typically levied difficult to raise the cash to pay their obligations. when the taxpayer has cash as a result of a sale, while recurrent taxes can raise issues of taxpayer liquidity. Sporadic property taxes - such as property transfer However, sporadic taxes can distort the property taxes, inheritance taxes, and capital gains taxes - market by discouraging transactions. In situations 82  |  Access to Land in South Asia: The World Bank Guidance Note where the government does not have a robust system As recurrent property taxes fall on immovable assets, for checking declared prices, tax evasion is likely as they are difficult to evade or avoid. Common challenges buyers and sellers can declare false prices rather include the failure of land registration systems to than the real transaction price. If the land registration record all properties and property transfers, valuation system fails to capture property transfers, it is also systems that are unable to produce assessments based unlikely that a government will be capable of collecting on current market values, and widespread exemptions. all the property transfer tax revenue to which it is Sporadic property taxes, on the other hand, can offer entitled. Second, sporadic taxes are typically collected opportunities for both legal avoidance and illegal by central governments, while recurrent taxes generate evasion. Owners may place the ownership of a property revenue for local governments. This raises questions in the hands of a company, for instance, allowing the as to what public bodies ought to be responsible for company to be sold in such a way that changes the infrastructure investment and alleviating any negative beneficial ownership of the property but not its legal consequences from development, and which should ownership, thereby legally avoiding sporadic property benefit from capturing value increases. taxes. A key factor determining the effectiveness of property Tax authorities need to be agile in their response and taxes is whether there is an effective system of sophisticated in their understanding of these issues development control and land registration. Equitable to avoid the erosion of the tax base. Revenues from and efficient property taxes require comprehensive recurrent property taxes are relatively predictable, but land records that identify all taxable property units those from sporadic taxes vary with the state of the and their characteristics, an enabling legal framework, property market. The collection of property taxes is a the technical and administrative capacity to accurately sustainable source of revenue in contrast to the sale estimate the market value of properties, and systems or lease of public land, which is a finite resource. In to deliver bills, collect payments, hear appeals against many countries, national tax authorities face issues of assessment, and monitor compliance. capacity – authorities do not have a good understanding Figure 6.1: Recurrent Property Taxation as a Proportion of Gross Domestic Product 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Bangladesh India Indonesia Japan Kazakhstan Mongolia Nepal People’s Republic of China Philippines Singapore South Korea Thailand Viet Nam Canada France Germany Poland Türkiye UK USA Source: OECD.Stat; Awasthi, R. and Nagarajan, M. (2020), Property Taxation in India: Issues Impacting Revenue Performance and Suggestions for Reform, Governance Global Practice Discussion Paper No. 5, The World Bank, Washington DC. 6. Value Capture  |  83 of how property taxes work and suffer from a lack of work in a similar way to capital gains taxes. If levied valuation expertise at a local level. As a result, property annually or periodically, then the question of taxpayers’ taxes are an under-utilized source of revenue. liquidity can arise. Most countries generate only a relatively small Special assessments, also sometimes referred to proportion of the property taxation revenues that as betterment levies, entail an additional tax or market leaders such as United States, United Kingdom, assessment paid by property owners within a defined Canada, and France achieve. Generally, Asian countries, geographic area (the “special assessment district,” with the exception of OECD members like Japan and or SAD). These taxes reflect the benefits that owners Korea, raise comparatively little revenue from this receive from a public improvement or are used to finance source. This indicates that there is significant potential the construction of such improvements. These tools for value capture using property taxes. try to match cost and benefit incidence by collecting additional taxes from owners who will derive benefits A World Bank analysis of India’s property taxes shows from improvements. Infrastructure investments that that Indian states collect far lower amounts in property produce benefits, such as reductions in congestion tax per capita than OECD countries 32. Although some of on alternative forms of transport and roads, become the gap may be due to differences in incomes per capita, capitalized into property values as properties in the the report notes that there are many high value areas vicinity of the improvements become more accessible. in Indian cities that are comparable to OECD countries, Businesses and households within the SAD will be which have the capacity for generating significant willing to pay higher prices to benefit from improved increases in property tax revenues. Low collection rates, accessibility. Once a local government establishes a historically low tax rates, the level of intergovernmental SAD, an assessment rate is applied to properties within fiscal transfers, levels of exemptions, opaque property that district. The rate may vary depending on whether markets, resource and capacity constraints in tax land is used for residential, commercial, or industrial administration, and incomplete cadastres also explain purposes, and the municipality may apply either a some of the differences in tax revenue collection constant or phased rate increase until the needed between these high value urban areas in India and funding amount is reached. The length of time the comparable locations in OECD countries. assessment is in place can also vary and will be decided based on local regulations and the required financing. (b) Betterment Charges and Special assessments These additional taxes can be used to pay for capital Betterment charges or levies are taxes that fall on improvements within the SAD. This capital payment unearned increases in the value of property that principally occurs in two ways. landowners passively enjoy. Such increases could come about because of a change in permitted use or „„ The municipality pays for the up-front cost of development, the construction of infrastructure, or the investment and is repaid over time by the more general influences such as population growth. special assessment revenues. In effect, the levy These charges are not levied upon increases in value meets the cost of servicing and repaying the debt that result from improvements. Betterment charges incurred in providing the infrastructure; or require valuations before and after the increases, and „„ Assessment revenue cash flow securitization. can be levied annually, periodically, or when a trigger This tool can be used when private property event occurs. If levied upon sale, then betterment levies owners acknowledge that their property could rise in value sooner if they agree to be assessed 32 Awasthi, R. and Nagarajan, M. (2020), Property Taxation in India: at a higher rate, rather than wait for the public Issues Impacting Revenue Performance and Suggestions for Reform, Governance Global Practice Discussion Paper No. 5, The World Bank, sector to identify and deploy capital funds for a Washington DC. specific improvement. 84  |  Access to Land in South Asia: The World Bank Guidance Note Infrastructure improvements are typically funded charge fees from those who apply for their services to out of borrowing rather than current tax revenues. help recoup part of their costs. This is partially because investment costs are usually Developers might reasonably expect to pay connection large compared with annual tax revenues, so the charges so that their developments are attached to cost needs to be spread over a number of years. It is utility networks. Under the polluter pays principle, also because borrowing allows the cost burden to be developers might also reasonably be expected to shared by beneficiaries who are not taxpayers at the contribute to improvements in infrastructure that time the improvements are made. These beneficiaries their developments necessitate, such as through the may subsequently move into the area or are future construction of roads, schools, public open spaces, generations of citizens, who will also benefit from the and enhancements to the provision of healthcare. improvements and ought to contribute to their cost. Infrastructure levy fees based on a sum per dwelling or The additional tax revenues can service the debt and per square meter of business space could be justified pay it off over time. under the polluter pays principle. Registration fees, development and connection (c)  In reality, countries often charge fees or levies that are levies, land use changing fees, and infrastructure unrelated to the actual costs of providing services or levies meeting the additional burden on infrastructure from development. These are, in effect, a hidden or stealth A land registry may charge fees for the registration betterment tax. Assessments tend not to be on the of property transfers in order to recoup the costs of basis of cost but the value of the development, typically running the service. Some countries finance land a percentage. Thus, a greenfield development might registries out of government budgets, while in others pay a lower development or utility connection fee than these registries function on a cost reimbursable basis one in a city center, even though the former required with users paying fees. The latter model is generally the construction of new infrastructure and the latter regarded as being good practice since it helps to align just a connection to existing facilities. the interests of the land registry with those of its customers and can serve to make it more responsive to (d) Tax increment financing their needs. Also, fee-based, independently operating land registries are less vulnerable to petty corruption Tax Increment Financing (TIF) is a mechanism whereby a than their central budget covered peers improving local government can invest in infrastructure and other the service. Similarly, bodies responsible for spatial capital investments using tax revenues to be generated planning and construction approvals could reasonably by future, anticipated incremental growth within a Building Hyderabad’s Outer Ring Road How impact fees financed a major infrastructure investment Hyderabad Municipal Corporation levied an impact fee on commercial construction activity within the Outer Ring Road Growth Corridor at the time of granting building permission to help finance infrastructure. A 1-kilometre stretch along both sides of the 162 km, eight-lane expressway Outer Ring Road (ORR) was designated as a Growth Corridor (ORRGC). A special impact fee was levied on development that takes place along the corridor. The Hyderabad Metropolitan Development Authority (HMDA) prepared a Comprehensive Plan and Special Development Regulations for the areas falling within the ORRGC, and the Hyderabad Municipal Corporation levied an impact fee to mitigate the impact of increased commercial construction activity. This was a one-time charge levied at the time of granting building permission. It is higher for commercial uses and increases with building height and is spent on road improvements and related measures. Source: Ministry of Urban Development. (no date). Value Capture Finance Policy Framework, Government of India. Retrieved from https://mohua.gov.in/ upload/whatsnew/59c0bb2d8f11bVCF_Policy_Book_FINAL.pdf. 6. Value Capture  |  85 defined geographic boundary. If, as a result of land municipality of private demand for development land development and infrastructure improvement, property failing to increase at a sufficient rate to meet its TIF values increase within this boundary, known as a TIF obligations. Another example might be the building of district, there should be an increase in the tax revenues a road that makes it feasible for agricultural land to be collectible there. The increased taxes (“increments”) converted into land for residential development. As the generated after the year when the TIF district was agricultural land is developed, property tax revenues declared are then periodically collected over a defined should increase. This can be effective in a period of period of time and deposited in a “ring-fenced” rapid urbanization, but once the rate of urban growth escrow account. The municipality, or local government slows, the rate of increase in demand for development authority, is then able to use the tax increments to fund land will also slow. As this scenario illustrates, the significant capital costs upfront, through borrowing viability of TIF depends upon an accurate assessment against anticipated cash flows. of future demand for development land and demand by households and businesses for the developments The bonding capacity should be no greater than the created. It should be remembered that developers present value of the incremental tax revenues that have a put option, in which they can walk away from would be received by the government over the desired proposed or actual developments by accepting the borrowing period (usually 10 to 25 years). The borrowing loss of whatever equity they have put into the scheme. capacity is strongly influenced by the accuracy with However, a municipality has no such option: It has which increases in tax revenues are predicted. There an ongoing commitment to service and repay loans is an obvious danger of appraiser optimism behind the secured under a TIF. projections. Taxpayers throughout the jurisdiction risk becoming liable for making up any shortfall through The TIF mechanism does not involve a rate increase. levying higher taxes on them, as the municipality has Rather, the mechanism relies on an anticipated increase a contractual obligation to service and repay the debt. in property values within the TIF district. When deployed Alternatively, it may have to reduce planned borrowing effectively, this tool can make projects self-financing for other purposes. and expand a city’s balance sheet. SAD revenues are considered more secure than those of TIF cash flows, A scenario where TIF would prove to be a useful because SADs capture a guaranteed percentage of mechanism might be where a municipality invested current property value in addition to a portion of future funds in remediating a well-located but environmentally increases. TIF districts, on the other hand, are financed contaminated former industrial site, which a developer by debt in anticipation of future increases in property was interested in redeveloping into a mixed-use value. residential and commercial neighborhood. Proceeds (e) Planning obligations and planning gain from a TIF bond issuance could be used to pay for the remediation whereby the future, incremental property Development requires consent from the municipality, revenue generated by the new project would cover debt as the local planning authority and the regulator of service payment on the bonds. In this example, it would construction. With planning obligations (also known make sense to deploy TIF if the redevelopment project as planning gain), a developer cannot just apply was financially infeasible but for a TIF-facilitated for consent but must offer gains to the community. investment in environmental remediation. Alternatively, This could be to mitigate the development’s impact the municipality could acquire the contaminated site at on the community by contributing to infrastructure its as is market value (depressed by the pollution). It improvements or by constructing specific infrastructure could then clean up the site, install infrastructure, and intended to alleviate problems that the development divide the land into lots, which it could either sell or will cause. At this level, planning obligations can be lease to developers. This would reduce the risk to the regarded as an extension of the polluter pays principle. 86  |  Access to Land in South Asia: The World Bank Guidance Note However, the policy can go beyond this and become a (a) Disposal of public lands means by which value from the development is captured When a public body sells surplus land, it can exercise by the community. Thus, the developer may be obliged a degree of control over subsequent development to contribute towards an objective of the municipality, through imposing conditions, known as covenants, such as constructing affordable housing. in the sales contract. These can be registered as a Planning obligations can raise a number of issues. restriction in the land registry. Purchasers can face Developers are likely to offer what is for them relatively positive obligations, such as being required to carry out economical for them to provide rather than what may be particular works or build infrastructure. They can also in the community’s best interests. It may be difficult for be subject to negative obligations, such as prohibitions public officials to work out what a developer can really on the development of agricultural land. Subsequent afford and, therefore, they may set their sights too low owners must apply to the public authority to have the or too high. Bargaining is likely to be asymmetrical, restriction lifted. The public body will then be in the with inexperienced negotiators from the municipality position to demand financial payment and/or require negotiating with the developer’s hardened commercial the developer to contribute to needed infrastructure, in managers. Unless the municipality has good real estate return for doing so. business capacity, it is unlikely to be able to assess Public bodies can also sell land so that access to it is the potential profit a developer should make from only possible via a ransom strip that they retain. Such a the development and its scope for requiring planning strip may be small, perhaps only a meter wide, but the obligations. Inequity between developers may also purpose is to prevent utility connections being made to occur as the process is one of negotiation rather than the site without the consent of the public body. Utilities being a set rate like a tax. will have to cross the ransom strip, which requires the A developer may also seek to renegotiate obligations permission of the public body. Such permission will when the development is underway, on the grounds that only be forthcoming in return for financial payment or they are no longer affordable and may even threaten to contribution to infrastructure. The use of devices such as abandon proposed developments unless concessions restrictive covenants and ransom strips is only feasible are made. If development opportunities are put out to if public bodies have the ability to enforce them. This tender by a municipality, then developers may bid for requires good record keeping, the registration of public these in the hope that they can renegotiate obligations assets in the land registry, and the ability to prevent later to reduce the burden on the grounds that the encroachment on public assets. development is allegedly no longer to be viable. The Public land can also be disposed of through leasing. result can be an inferior one to accepting a lower bid This allows the public body to retain a long-term interest from another developer who actually delivers on its in the land as well as being able to exercise control obligations. through lease conditions. It can benefit financially through the receipt of fixed or variable ground rents. ii. Development-based instruments These rates can vary by a fixed percentage uplift Development-based instruments occur when a public each year or by periodic revaluation to market prices, body owns rights over the land on which a development which allows public bodies to share in the uplift in will take place. Developers are obliged to purchase values. It is also possible to build into the contract these rights or else their proposed developments the potential for claw back if the developer makes a cannot go ahead. The public body is thus in the position greater than anticipated profit or for any overage to be to extract part of the profit that developers will make shared between the landlord and the developer. The from projects. developer’s profit is the difference between the rent 6. Value Capture  |  87 charged to the end occupier and the ground rent paid clean up any contamination, and divide up the land into to the public body. This profit has to fund the costs of lots. Developers then bid for individual lots and are development. The developer bears the risk that the required to carry out development in accordance with development does not prove to be as profitable as the master plan. This latter approach has merits if the expected or proves to be costlier to carry out, while land is not ready for development, for instance because the income payable to the ground landlord is shielded of contamination. The public body can recoup the costs from these risks. of cleaning up an area and constructing infrastructure from the sale or lease of the land and benefit from Public bodies can play a passive or active role in the betterment. development of surplus public lands. A passive role is when the public body advertises the land for lease (b) Joint developments and potential developers submit a bid which includes their development plans. The public body can choose Joint developments are partnerships between two between bids on the basis of best value and not just or more parties to develop a site. Public bodies can the highest price according to what the developer is participate in joint developments with the private prepared to contribute towards infrastructure, public sector. Often in a development between the public realm, social housing, or other elements. Alternatively, and private sectors, the public body contributes land public bodies can play an active role in development. and the private sector capital and expertise, and This involves acting as the master planner of an area, they share the profits. A joint development could establishing the design of the development and the be on a greenfield site or a brownfield site that is uses of different areas. It can construct infrastructure, being repurposed. The project would be expected to Leasing land to build Mumbai’s Bandra Kurba complex Long-term leases helped finance infrastructure for a new business district The Bandra Kurba complex is intended to be a new central business district in Mumbai to relieve pressures elsewhere. The Mumbai Metropolitan Region Development Authority (MMRDA) was appointed in 1977 as the Special Planning Authority for the project’s development. The authority reclaimed marshland near the Bandra-Kurla road and channelized the Mithi River for the development and construction of a large office hub. While it initially collected rents and development fees from developers, starting in 2003 it adopted a policy of granting 80-year leases to developers, allowing them to undertake development. Leases were sold through auction and have raised the capital needed for infrastructure development, including roads, rail links, and bridges, and to finance the Mumbai Urban Transport Project. Land is released once existing sites have been absorbed by the market. Developers assume the financial responsibility for bringing their development to market. How India’s Railway Land Development Authority monetizes land A multifaceted development strategy The RLDA was established in 2006 as a statutory authority to manage railway lands that were not expected to be employed for operational purposes by the Zonal Railways in the foreseeable future. Its mandate is to develop these lands for commercial use to generate funds for Indian Railways, which initially identified about 43,000 hectares of vacant land and multi-functional complexes, redundant railway stations, and colonies for commercial development. RLDA monetizes land by leasing it to private developers in its as-is state or after self or joint development. In the former case, RLDA leases lands for a period of 45, 60, or 90 years in return for an upfront lease premium. The authority carries out redevelopment of railway stations and colonies through Special Purpose Vehicles, Public Private Partnerships, and joint ventures. Before putting the land out for bids, it carries out works such as the removal of railway structures, rehabilitation, resolving title issues, obtaining consents from local authorities, and removing encroachments. 88  |  Access to Land in South Asia: The World Bank Guidance Note provide the infrastructure necessary for development. (d) Sale of Development Rights A joint development could also be to increase the Through their control of land use planning and zoning density of development. This approach has been regulations, municipalities have the power to affect the used in the United Kingdom by Network Rail (the market value of real property assets. They are usually owners of railways tracks and main railway stations) the body in which rights to change permitted uses of and Transport For London (the owners of the London land have been vested and can thus sell permits to Underground) to exploit air rights above railway monetize the value created by development. They can stations. These ventures have been used to raise also adjust regulations by, for example, levying fees in finance for railway improvements and also as part of exchange for allowing increased density (“up-zoning”) projects to upgrade stations. or for rezoning from low-value to higher value uses. (c) Land pooling and readjustment Developers may be able to purchase certain rights if they provide public benefits, such as contributions In these schemes, landowners pool their land in order to infrastructure or the provision of public realm to enable development to proceed. They are also likely areas or social housing. They may also be able to to contribute a portion of their land so that it can be sold obtain transferrable development rights, which can to raise funds for the development and infrastructure be exercised in other areas, in return for preserving costs. In some countries, landowners are obliged to historic buildings or environmentally sensitive areas. hand over a proportion of their land to the municipality in areas that are zoned for development to contribute Development rights can be sold through an auction towards the costs of the infrastructure. This process is system, whereby the municipality sells the rights designed to make development feasible and, therefore, to develop in a specified geographic area to the uplift the value of owners’ remaining land. highest private sector bidder. Mumbai, Sao Paulo, Uses of land readjustment in South Asia Countries’ processes differ, but each faces similar challenges and opportunities Land readjustment is used in South Asia for urban expansion and farmland consolidation, and in India for post disaster reconstruction. Each country in the region has a different process for how these projects are initiated, as well as landowners’ obligations and how they are compensated for lost land. In private-led projects in Bangladesh, developers submit a detailed land use plan and at least 75 per cent of owners must give their consent for the project to move forward. When local governments initiate land readjustment, participation is mandatory. 30 per cent of the area is reserved for public improvements and infrastructure. After readjustment, landowners receive an area proportional to their original holdings. In Pakistan, public authorities and private developers can initiate readjustment in urban areas. 20 per cent of the readjusted plots are reserved for public improvements. Landowners receive plots in proportion to the value of their original holdings and typically retain 10 – 20 per cent of the original land area for commercial plots and 25 per cent for residential plots. In India participation is mandatory when a public body undertakes land readjustment, and land is expropriated when owners resist. 23 – 50 per cent of the land is used for public improvements. Owners receive plots with an area proportional to their original holding, with compensation being paid where the new plot is less valuable than the original one. In each country, there are challenges in the form of the legal framework, the state of land records, resistance by landowners, and the risk to owners stemming from the state of the property market. The process can work to the disadvantage of tenants, informal owners, and smaller owners. Sources: OECD/Lincoln Institute of Land Policy, PKU-Lincoln Institute Center. (2022), “Bangladesh”, “India”, and “Pakistan”, in Global Compendium of Land Value Capture Policies, OECD Publishing, Paris. Retrieved from https://doi.org/10.1787/66ed3050-en; https://doi.org/10.1787/8634-cce0-en; https://doi.org/10.1787/1eedc9e8-en 6. Value Capture  |  89 Table 6.2: The use of land value capture tools by Bangladesh, India, and Pakistan Land value capture tool Bangladesh India Pakistan Charges for development rights Rare Frequent Frequent Land readjustment Moderate Moderate Moderate Infrastructure levy Rare Moderate Never Strategic land management Moderate Moderate Moderate Developer obligations Never Frequent Never Source: OECD/Lincoln Institute of Land Policy, PKU-Lincoln Institute Center (2022), Global Compendium of Land Value Capture Policies, OECD Regional Development Studies, OECD Publishing, Paris. Retrieved from https://doi.org/10.1787/4f9559ee-en. and New York City have all sold development rights in including spatial planning and the control of certain geographic areas and used the revenue from construction, the fees and charges developers pay may those sales to fund public improvements. Development end up in the hands of corrupt officials or politicians rights may be tradeable so that successful bidders can rather than the municipality’s budget. sell them, as on the stock exchange in São Paulo, Brazil. The availability of unused development rights does not 6.3 Prerequisites for the Use of necessarily confer market value. When the real estate Value Capture Instruments market is depressed, unused development rights will command less value than when market demand is Table 6.3 sets out the constraints over the use of robust - and may even have no value at all. Even if the the various land value capture instruments. Four property market is buoyant in a country as a whole, there overarching conditions need to be present before any may be localities which developers find unattractive. of the instruments can be used effectively. As a result, policies that may work effectively in certain (i) The ability to control development and changes of municipalities may prove ineffective in these localities land use so that illegal or informal development due to lack of demand for property. does not take place. If these happen, developers can evade land value capture instruments. The municipality’s ability to control development effectively, so that there is no illegal or informal (ii) A comprehensive register of properties so that all construction, is implicit in the sale of development the properties affected by an improvement can be rights. Illegality is not solely a question of whether identified. a building has secured the necessary development (iii) The technical capacity to value properties at their or construction consents before it is built. It can also market values and to estimate the profits that include illegal densification, such as when additional developers are likely to make from proposed floors are added to high-rise buildings, or when a developments. This requires qualified valuers change of use takes place without consent, such as the who have access to a comprehensive and accurate conversion of ground floor apartments into restaurants record of transaction prices. or shops. Municipalities’ capacity to control illegal (iv) Officials with the ability to negotiate on development is undermined if the land registry is not a equal terms with developers based upon comprehensive record of what exists on the ground. an understanding of the value of completed Good governance and the rule of law are also essential developments, the profits developers can expect prerequisites for the sale of development rights. to make, and the capacity of developers to make When there is widespread corruption in development, payments. 90  |  Access to Land in South Asia: The World Bank Guidance Note Land Value Capture Instruments Prerequisites Comprehensive land records and valuation characteristics Property taxes (recurrent or sporadic) •  Technical capacity to value properties at their market values •  To be capable of being levied on market values •  Revaluation occurs regularly •  Robust and rigorous system for checking accuracy of declared prices compared •  to market values Betterment charges and special Ability to assess the benefit owners receive from the improvement •  assessments Registration or land use Ability to assess the market value of the properties being registered •  changing fees, and development, Ability to assess the benefit to owners from permits granted •  infrastructure, and connection levies. Ability to assess the benefits to owners from infrastructure •  Tax increment financing Ability to levy annual (recurrent) property taxes on owners based on the •  property’s market value Planning obligations, planning gain Ability to assess the impact of a development on the community and what •  developers should offer in terms of mitigation under the polluter pays principle Ability to estimate the value of the completed development, the profits that •  developers stand to make, and what developers have the capacity to pay Disposition of public land through Ability to estimate the value of the completed development, the profits that •  sale or ground-lease, joint developers stand to make, and what developers have the capacity to pay development, sale of development rights, or land pooling/readjustment Table 6.3: Land value capture mechanism constraints Limited valuation Limited access to cadastre/records Weak real estate Lack of land use capital markets property rights Deficient land Limited fiscal controls and regulations Challenges Insecure capacity powers market Property taxes Betterment levies Registration, development, connection fees, infrastructure levies Tax increment funding Disposition of public land, through sale or ground-lease Joint development Sale of development rights Land pooling/readjustment Planning obligations, planning gain   Prohibitive challenge (regulatory/systemwide changes are prerequisite)   Prohibitive challenge (regulatory/systemwide changes are prerequisite)   Limited systemwide changes needed. Implementation possible in near term 6. Value Capture  |  91 6.4 Conclusion A variety of factors also influence which mechanism will be the most appropriate. This selection will depend on, Land-based financing and land value capture among other factors, a municipality’s policy goals, fiscal mechanisms have relative advantages and situation, its ability and willingness to take on risk, real disadvantages depending on the project and market estate market conditions, and the institutional and circumstances. They also depend on specific market, regulatory capacity to implement each tool. Crucially, institutional, and regulatory pre-conditions to be viable the authority must have the valuation capacity to form and function effectively. There needs to be a certain a precise judgement of the value uplift that is likely to level of institutional capacity, particularly the ability to result from the infrastructure investment, and therefore prevent illegal and informal development and changes the scope for value capture. of use; comprehensive records of ownership so that those to be targeted by land value capture tools can Land-based financing tools can be quite useful to be identified; the ability to assess the market value of broaden funding options for infrastructure investment. properties in order to identify owners’ ability to pay; However, they require specific regulatory, market, and and the capacity to negotiate on equal terms with institutional conditions to function effectively, and experienced private developers. are not a panacea to the problem of insufficient funds available for infrastructure investment. Lahore, Pakistan. Mika Törhönen 92  |  Access to Land in South Asia: The World Bank Guidance Note 7 Access to Land in Transit- Oriented Development Access to Land in Transit-Oriented 7.  Development 7.1 Introduction of securing access to land for TOD projects: Ownership, tenancy, site definition, severance, and compensation T OD has been a feature of urban planning and development for centuries. It is a form of development designed to create more accessible, issues in securing rights and assembling many parcels of land for construction have plagued the implementation of TOD projects in the region. These issues are linked to livable, and well-connected cities and metropolitan broader matters of planning, gaining temporary access regions. Whereas the nineteenth century saw the and use of land adjacent to infrastructure corridors for development of cities shaped by suburban railways, construction, land for quarrying of materials, temporary horse buses, and tram public transport, the twentieth use of land for bypasses during construction, electricity century led to the development of cities reliant on roads easements, land for relocation and construction of and private automobile use. The growing problems of housing and business premises, and health, safety, traffic congestion, urban sprawl, extended journey to and security issues within and outside proposed work times, and inner-city decline have resulted in a construction zones. renewed interest in TOD to support the revitalization of cities. An important consideration in planning TOD projects is the creation of opportunities to realize value- Cities in South Asia are at the beginning of their TOD added and capture potential from projects to improve journey. They have gone through an awareness phase revenue flows, cover project costs, and contribute to that started last decade and then translated in the the longer-term availability of other public goods and second half of the decade into national-level policies. services. TOD projects should be designed to support Metropolitan authorities have begun proactively wider corridor zone development and redevelopment, investigating such an approach as part of their PPPs, and transfer development agreements, and to expansion planning programs. increase the share of returns to public revenues and Access to land is paramount for successful TOD benefits from amenities. These matters are critical to project development. This issue causes delays and open future land access opportunities and stimulate cost overruns on many TOD projects. Gaining access investment and economic development. often involves acquiring, consolidating, assembling, This chapter provides practical guidance for World and reassembling many small parcels of land to Bank staff to address issues of access to land for develop transport corridors, hubs, station areas, multi- TOD-funded projects. It describes the status and functional employment and activity centers, and to challenges of access to land for TOD projects in accommodate the consequential displacement and South Asia, land administration and management relocation of residents and businesses. requirements to access land, and the need for good Many South Asian TOD projects experience difficulties project land governance arrangements before and gaining access to land and applying principles such as after the commencement of the projects. It expands land value capture. Property acquisition is just one part on the TOD Implementation and Resources and Tools 7. Access to Land in Transit-Oriented Development  |  95 Transit oriented development in Pune, India. Gerald Ollivier (WB 202133) developed by the World Bank to guide the “Integrated urban places designed to bring people, implementation of TOD. References and case studies activities, buildings, and public space together, provide additional information for readers to gain more with easy walking and cycling connection between information on good practice access to land for TOD them and near-excellent transit service to the rest projects. of the city. It means inclusive access for all to local and citywide opportunities and resources by the 7.2 TOD and Types of Projects most efficient and healthful combination of mobility modes at the lowest financial and environmental The concept of TOD is understood and applied in many cost and with the highest resilience to disruptive countries, albeit with varying degrees of success. There events. Inclusive TOD is a necessary foundation for are many definitions of TOD projects. The following has long-term sustainability, equity, shared prosperity, been adopted as a working definition: and civil peace in cities.”34 33 Ollivier, G., Ghate, A., Bankim, K., and Mehta, P. (2021), Transit-Oriented Development Implementation Resources and Tools, 2nd Edition, Global Platform for Sustainable Cities, The World Bank, Washington, 34 Institute for Transportation & Development Policy, What is DC. Retrieved from https://documents1.worldbank.org/curated/ TOD? Retrieved from https://www.itdp.org/library/standards- en/261041545071842767/pdf/Transit-Oriented-Development- and-guides/tod3-0/what-is-tod/#:~:text=TOD%2C%20or%20 Implementation-Resources-and-Tools-Second-Edition.pdf transit%2Doriented%20development,the%20rest%20of%20the%20city 96  |  Access to Land in South Asia: The World Bank Guidance Note 7.3 Main Types of TOD Projects 7.4 Description of the Types of TOD TOD projects vary in type, size, scope, scale, and mix Projects of transportation modes. Overall, the purpose of TOD There are seven broad types of TOD projects. Depending projects is to connect multiple nodes and clusters on scope and scale, these may be single-mode or of economic, social, and personal activities in urban include a range of mixed-mode transport and facilities. areas and metropolitan regions through a range of The degree of difficulty associated with issues related public transport systems and services. Successfully to access to land is affected significantly by the scope, designing and developing a TOD project requires a wide scale, and type of TOD project. range of considerations beyond planning and design, acquiring land and property rights, and well-managed Network TOD projects occur at different scales construction. of development. Large-scale projects will involve connecting rail, ferry, and bus transit corridors at TOD projects should aim to recover, as much as regional and subregional hubs of economic, social, possible, their development, construction, and logistics, and intermodal transfer facilities. They foster operational costs. TOD projects is should also be regional or city scale accessibility to jobs and affordable catalysts for development or redevelopment, value- housing. At a local area level, they may involve adding, and value capture to maximize public benefit connecting neighborhoods or local development opportunities. corridors to transport hubs that form part of an arterial The scale of TOD projects varies significantly in the corridor or region-wide transportation network. South Asia Region. They can be small, involving station Corridor TOD projects involve improving, widening, development in a local precinct (See case study Box 1), and developing roads, railways, busways, and ferry or extensive projects like the Ahmedabad Bus Rapid terminals to enhance access to mixed-mode transport Transit System (See case study Box 2). Figure 7.1 shows facilities and services along arterial development the scope and scale of TOD projects. Most regional corridors within cities and regions. These are large- projects involve corridor rail or bus transit systems. scale, expensive projects involving extensive land Figure 7.1: TOD Scales of Planning Source: Ollivier, G., Ghate, A., Bankim, K., and Mehta, P. (2021), Transit-Oriented Development Implementation Resources and Tools, 2nd Edition, Global Platform for Sustainable Cities, The World Bank, Washington, DC. 7. Access to Land in Transit-Oriented Development  |  97 acquisition, infrastructure development above, at, 7.5 Factors Driving the Trend and below ground level, relocation of people, and adjustments to land. They include a vision for urban Toward TOD development along the corridor. A range of factors drives interest in TOD projects by Precinct or Local Area TOD projects involve improving governments across the region. These include: public access to new developments, redevelopments, „„ Rapidly growing traffic congestion in the inner or regeneration of residential, industrial, and mixed-use city and metropolitan regions, which is slowing areas to provide better access to services and single or journeys to work and logistics systems, adding mixed modes of transport. TOD projects may include to the cost and inconvenience of living and the development of pedestrian streets and precincts, working in large cities. cycleways, local area networked shared transport, and „„ The need to improve access to higher density moped corridors and parking spaces. developed areas to capitalize on agglomeration economies and open opportunities for Cluster TOD Projects involve the development of revitalization and regeneration area projects. transport and centers of associated economic and social activities linked to transport nodes and hubs via a mix „„ Interest in capturing part of the value stemming of routes, places, and accessways. Projects may include from improved accessibility to finance urban elevated, surface, and underground infrastructure development. development to connect nodes of activities. „„ The need to reduce the energy costs (especially non-renewable fuels) of transport in cities and Hub TOD projects include a mix of transit and non- metropolitan regions. transit activities connected to a transport, logistics, or communication hub, which in turn facilitates „„ A growing trend towards inner-city living connections to other nodes and hubs. Hubs include and revitalization, with closer proximity to multi-modal seamless transport services facilities, work, easy access to community facilities and which may be located above, at, or below ground level. services, and walkable lifestyles separated from traffic. Nodal TOD projects involve the development of „„ Changes in family structures so that there are stations, intermodal transfer facilities, terminals, and more singles, as well as an aging population other types of key infrastructure that support improved needing easy access to care and health services. access to the movement of goods, services, and people. Nodal TOD projects are normally single-entity „„ Growing national support for smart city growth. developments that may or may not be connected to a „„ A new focus of national and state government wider cluster or network system of activities. They may on urban development policy. include surface and underground developments. Site-level TOD projects involve the development of 7.6 The Rationale for Supporting amalgamated parcels near a rapid transit station. They TOD Projects involve quality transfer to stations and other types of key infrastructure that support improved access to the Transit Oriented Development is promoted as an movement of goods, services, and people. Site-level “exciting fast-growing trend in creating vibrant, TOD projects are normally single-entity developments liveable, sustainable communities. It creates compact, driven by land availability, and which may or may not walkable, pedestrian-oriented, mixed-use communities be connected to a wider cluster or network system of centered around high-quality train systems. It is integral activities. They may include surface and underground to contemporary regional planning, city revitalization, developments. suburban renewal, and walkable neighborhoods 98  |  Access to Land in South Asia: The World Bank Guidance Note combined. It is also seen as a sustainable solution to There are many studies, guidelines, and toolkits that the serious and growing problems of climate change highlight the important benefits generated from TOD38. and global energy security by creating dense, walkable In South Asia, TOD offers an opportunity to revitalize communities that significantly reduce the need for and reduce the gridlock in large cities and to sustainably driving and energy consumption35”. shape urbanization. High congestion levels, poor access to transport and urban services, and constraints TOD is associated with land value capture and strongly within logistics networks has resulted in declining linked to sustainable urban development and smart productivity, de-industrialization of inner-city areas, cities36. It is supported by principles that encourage and the relocation of firms and industries to industrial an integrated approach to urban land-use planning, zones and business parks on the urban periphery. TOD transportation planning, and economic and social projects can help to revitalize these areas. In response development. “It means inclusive access to local and to changes in employment patterns and journeys to citywide opportunities and resources by the most work, TOD projects are becoming more polycentric, efficient and healthful combination of mobility modes, leading to changes in overall metropolitan planning. at the lowest financial and environmental cost, and The planning and mix of TOD projects require a balance with the highest resilience to disruptive events. between inner-city corridor-oriented development and Inclusive TOD is a necessary foundation for long-term polycentric infrastructure and service networks that sustainability, equity, shared prosperity, and civil peace improve metropolitan-wide internodal and intermodal in cities.”37 connectivity.39 Table 7.1: High-Quality Transit and TOD Benefits Benefits of TOD projects Benefits of improving mobility •  Improved economic opportunities options for non-drivers • Equity objectives (benefits disadvantaged groups) Option value •  Benefits from reduced Reduced traffic and parking congestion •  automobile traffic Road and parking facility cost savings •  Vehicle cost savings •  Reduced chauffeuring burdens •  Traffic safety •  Public fitness and health reductions •  Energy conservation and emission reductions •  Benefits from more compact, •  Improved accessibility transit-oriented development • Preserves open space and reduced costs of providing public infrastructure and services • Agglomeration efficiencies increase economic productivity Source: Litman, 2018 35 Kirk, T. (2018) Transit-Oriented Developments. 2018 [cited 2022 8 October]; Available from: https://www.thinkaec.com/transit-oriented- developments/#respond.; Ghosh, M., Perception, Design and Ecology of the Built Environment: A Focus on the Global South. 2020: Springer International Publishing. 36 Mathur, S. (2019), “An evaluative framework for examining the use of land value capture to fund public transportation projects”. Land Use 38 Salat, S. and Ollivier, G. (2017), Transforming the Urban Space Policy, 86, pp. 357-364. Through Transit-Oriented Development: The 3V Approach, World Bank: 37 Institute for Transportation & Development Policy, TOD Standard. 2017. Washington, DC.; Kidokoro, T. (2019), Transit-Oriented Development Retrieved from: https://www.itdp.org/library/standards-and-guides/ Policies and Station Area Development in Asian Cities, ADBI Working tod3-0/what-is-tod/.; World Bank Transport Global Practice.(2020) Paper Series, Asian Development Bank Institute, Tokyo. Synopsis of Bank-Funded Bus Rapid Transport Projects, World Bank, 39 “Travel patterns have changed for good. Transport systems should, Washington, DC. too.” The Economist, 19 May 2022, p. 3. 7. Access to Land in Transit-Oriented Development  |  99 TOD can connect the different nodes, elements, Figure 7.1: Principles of Good Transportation and networks of activities that occur in South Asian cities. It can benefit the citizens of the region by connecting where they live with their work, providing them with enhanced access to daily activities, and improving the livelihoods, network systems, and prosperity of cities in the region. The improved agglomeration economics it creates can result in wider economic benefits, as firms can locate themselves close to critical infrastructure and supply chain services, provide better access to employment opportunities, and deliver greater opportunities for innovation. 7.7 TOD Supportive Principles TOD can be supported and encouraged by applying the following principles for good transportation, open spaces, and built environment planning and development40: The following factors related to access to land Source: Ollivier, G., Ghate, A., Bankim, K., and Mehta, P. (2021), Transit- need special consideration during the planning Oriented Development Implementation Resources and Tools, 2nd Edition, and development of TOD projects: Global Platform for Sustainable Cities, The World Bank, Washington, DC. „„ Train stations need good access as they are a prominent feature of town and urban centers „„ Provision, in the project design, for transport routes and secure drop-off and parking for „„ Pickup, drop-off, park and ride facilities at the bicycles, scooters, and auto-rikshaws. train, bus stations, and ferry terminals „„ Easily accessible, large, and secure ride- „„ Collector-support transit systems, e.g., in bicycle and scooter parking areas within streetcars, light rail, buses stations. „„ Regional and local transport nodes and hubs „„ Bikesh are rental systems and bikeway containing a mixture of uses nearby (office, networks integrated into stations. residential, retail, civic facilities) „„ Managed parking inside a 10-minute walk „„ Design of pedestrian areas to enable the free around the town center/train station. safe flow of movement „„ Integration of informal sector services with the „„ Urban parks and open spaces transit system. „„ High density, walkable district in a 10-minute walk circle surrounding the train station 7.8 Factors Affecting Access to Land „„ Compact development and housing diversity A broad range of factors and issues affect access 40 Growth Management Queensland. (2010). Transit-Orientated to land for TOD projects. Many of these are not well Development: A guide for practitioners in Queensland, State of documented and may require extensive investigation, Queensland, Brisbane. Retrieved from https://cabinet.qld.gov. au/documents/2009/dec/tod%20publications/Attachments/tod- consultation with owners and occupiers, and an guide[1].pdf understanding of customary land law practices. 100  |  Access to Land in South Asia: The World Bank Guidance Note Figure 7.2: Planning and Implementation of TOD Source: Ollivier, G., Ghate, A., Bankim, K., and Mehta, P. (2021), Transit-Oriented Development Implementation Resources and Tools, 2nd Edition, Global Platform for Sustainable Cities, The World Bank, Washington, DC. 7. Access to Land in Transit-Oriented Development  |  101 TOD projects involve a multiplicity of stakeholders, each or sewerage41. Residential tenancy agreements are with distinct roles in planning and implementation. a form of tenure. In SAR, many of these are informal Success requires aligning the interests of transport and or semi-formal and are seldom registered unless they urban planners, economic development experts, real are at the high end of the property market or involve estate developers, and the community located near a long lease. Tenancy rights – especially rent control – such projects. While transit and basic infrastructure can significantly affect acquisition and compensation development (utilities, roads and sidewalks, public claims when developers are gaining access to land. space) are developed under the oversight of public Occupancy of property subject to rent control is a authorities, private developers construct the majority of valuable right for the tenant but reduces the freehold TOD-related investments (residential, offices, shopping value, thus affecting the balance of compensation facilities) based on masterplans and land availability. payable to owners and occupiers. Identifying rights that apply to land needed or affected Land-use Rights affect the uses and value of the land by TOD development presents difficult challenges that may need to be acquired for a TOD project. In during project design. During that critical phase, a many cases, the land to be acquired or affected by a careful assessment must be made of existing rights to TOD project is not used for the purpose for which it was all land and property that needs to be acquired or is zoned. Occupants of land and property in dense urban impacted by a TOD project. Land rights for TOD projects areas tend to maximize land use, thus increasing its can be the subject of legal disputes, so it is critical that value – especially when negotiating compensation over all elements of land administration and management land that must be acquired for a TOD project. Some are fully investigated and documented. governments will use land-use planning development rights to set a value on land for compensation purposes, The following factors require careful investigation arguing that existing land-use activities are illegal or and documentation during project design and exceed the intensity of use permitted by the building implementation. code. This can lead to the undervaluation of land and result in prolonged negotiations and litigation to arrive Occupational Rights to land in SAR are often conveyed at a fair market value for land procurement. to occupants of land without formal documentation. This is particularly relevant to informal settlements on Liens are a right to keep possession of property public and private lands occupied without objection belonging to another person until a debt owed by over a long period. In some cases, claims for adverse that person is discharged. In SAR, many properties occupation rights may be in process in the court and lands have unregistered private liens imposed system. Locating such cases is difficult but should be upon owners or occupier, who are not always known. flagged for investigation as early as possible in TOD The extent of net debt is often unknown but is often project planning and design. quite high. Liens are a hidden impediment to gaining access to land: If not handled carefully, they can have Tenure (Rights) involve freehold, leasehold, or other unintended adverse consequences on occupants of arrangements which may or may not be registered. land affected by TOD projects. Where well-managed land registries exist, confirming tenure status is not an issue. But when land records are Easements are property interests registered on land managed poorly, a lengthy investigative process may that allows the holder to use property they do not own be necessary to establish tenure status. or possess. Easements apply to utility services laid This process can be complex in SAR, as ownership 41 For a discussion of the varying tenures that have evolved in Delhi and Ahmedabad see Kundu, A. (2002). “Tenure security, housing investment rights may belong to institutions such as co-operatives, and environmental improvement: the cases of Delhi and Ahmedabad, India”, in Payne, G. (editor), Land, Rights and Innovation: Improving with those affected having secure tenancy rights or no Tenure Security for the Urban Poor, ITDG Publishing, London, formal tenure but a secure supply of electricity, water, pp. 136 – 157. 102  |  Access to Land in South Asia: The World Bank Guidance Note on, over, or above specific parcels, land, or property. to projects once completed. In some cases, this will They also include many private rights of access, such involve temporarily depriving citizens of rights, such as as those on which farming may depend, and can be access to land or temporary relocation or closure of a seasonal. Many easements are not registered formally business, which will need to be compensated. on a property title but are documented by utility Topography or terrain, especially slope, affects the agencies or in private land records. When registered, accessibility and overland water flow rights on to they are not necessarily recorded on both the property adjacent land and properties during and after the over which they can be exercised and that which has construction of projects. Additional acquisition or the power to exercise them. flood mitigation works on impact-affected land may Poor land records management by utility agencies be necessary if this is severe. In extreme cases, it may and land registries makes the discovery of easements involve compensation or significant acquisition or difficult. Common law easements that may be implied stabilization of land and property along water courses or prescribed by using land for a long time without and streams where flood flows may be affected by the secrecy, permission, or force need careful attention. construction of a TOD project. In other cases, it may India’s Easements Act of 1882 addresses problems affect rights of navigation and use of waterways. associated with continued easement access to land Existing development close to or within a TOD affected by development projects. However, issues construction zone may be heavily impacted or damaged around access to small pockets of severed land need by work activities. Structures may need to be removed clarity when dealing with TOD development projects. or existing use rights temporarily restricted, as they Other Rights such as airspace development, water, may block site access or prevent occupants from and construction materials resource extraction, enjoying the full use of land rights. The developers construction transport and storage42, tunneling43, may consider the acquisition, temporary prohibition, or and restriction on development near defense land are compensation for premises taken or vacated by owners matters that may also require investigation to provide or occupants to gain unrestricted access to land during clean access to land for TOD projects. There may also construction. be rights to harvest certain products, forage, or use Restricted Road Access to land during and after land for seasonal grazing that are exercisable by those construction affects property rights, which may call for who are not owners of the land. TOD development can compensation for landowners or adjustments to the also have adverse impacts on rights to use property land itself. Temporary roads and accessways, as well as outside of the corridor itself, for instance, as a result of temporary works, such as site compounds, are common noise or pollution. features of TOD projects. These require the agreement or purchase of rights on crossing or using land and 7.9 Physical Access to Land possible compensation for loss of use. A range of physical factors affect access to land involving TOD projects. These may impose restrictions 7.10 Land-use Planning and on land use and result in other impediments during Development construction and restrict the use of rights and the enjoyment of the use of land and property adjacent Land-use planning and development rights affect many aspects of compensation, betterment, and continuing 42 Sezer, A.A. and Fredriksson, A. (2021). “Environmental impact of land-use rights during and after construction. These construction transport and the effects of building certification schemes.” Resources, Conservation and Recycling, 172, p. 105688. matters require careful consideration during project 43 “Bullet train project: Bids issued for underground tunnel construction,” preparation and cost estimates to determine how much The Indian Express, Express News Service, 24 September 2022, New Delhi. money should be allocated to access the land. 7. Access to Land in Transit-Oriented Development  |  103 Land-use planning is important for managing significantly adds to time delays and project costs, and fostering the orderly development of cities which can substantially impact land access and use and metropolitan regions. The effectiveness of rights. In the case of some large-scale projects, it may planning varies widely across the SAR, with many be sensible to set up a separate authority to allow local governments casting a blind eye or lacking the integrated approval and permitting on all aspects of capacity to deal with developments that illegally the project to streamline SAR countries’ very complex violate zoning schemes and development control and bureaucratic procedures for gaining development requirements. Many issues around land-use rights approvals. changes invariably end up in the court system and can involve protracted litigation around compensation 7.11 Land Acquisition and adjustments. It is essential that during the planning stages of TOD projects, design teams are Most TOD projects commence before all lands fully cognizant of the requirements of current land- necessary for the project have been secured, especially use planning and how they may affect compensation for later construction phases. However, not all land and design issues. for TOD projects needs to be acquired. In many cases, alternative means of acquiring access to rights linked Transferable Development Rights (TDR) are voluntary, to turnkey or long-term leasing arrangements may be incentive-based tools that allow landowners to sell a favorable alternative to outright purchasing land. In development rights from their land to a developer or India, the primary means of gaining access to land are other interested party, who can then use these rights land acquisitions and land pooling/readjustments45. to increase the density of development at another There may also be opportunities for swaps involving designated location. They have been applied to TOD transferable development rights as compensation for projects as an incentive to extract public goods from land severances. This may call for consideration of major projects in India.44 land banking to enable exchanges to be made as an TDR can be used to reduce or offset compensation alternative to full compensation for land acquisition46. costs. Their value is variable and depends on the level Land acquisition, or restrictions on land-use rights, of demand in the property market. They can also be inevitably involves consideration of value and fair, used to enhance the public goods provided by TOD equitable, and timely compensation. It is unacceptable projects through the construction of more public open for affected persons to be denied due compensation spaces or facilities that enhance the non-economic because the budget allocated for the TOD was value of projects, such as the preservation of historic inadequate or has been exhausted by cost or time buildings and environmentally significant habitats. overruns. Their use depends upon the ability of the local planning authority to control unauthorized development in the receiving area. 7.12 Governance: A Core Problem Affecting Implementation of TOD Development Approvals can impose significant constraints on access to land for TOD projects. In The issues affecting access to land are not unique to most SAR countries, the issuance of development TOD projects. These issues often stem from a complex approvals and permits is conducted independently by multi-level government agencies and authorities. This 45 Sharma, M., et al. (2020). Knowledge Product 2: Land Value Capture For Transit Oriented Development - A Demonstration, National Institute of 44 Suzuki, H.A.M., Jin, A., Hong, Y-H., Tamayose, B., (2015). Financing Urban Affairs, New Delhi. Retrieved from https://niua.in/intranet/sites/ Transit-Oriented Development with Land Values: Adapting Land Value default/files/2464.pdf Capture in Developing Countries, World Bank Urban Development 46 Chava, J. and Newman, P. (2016). “Stakeholder Deliberation on Series. The World Bank, Washington, DC. Retrieved from https:// Developing Affordable Housing Strategies: Towards Inclusive and documents1.worldbank.org/curated/en/468551468165570019/pdf/93 Sustainable Transit-Oriented Developments”, Sustainability, 8(10), 6860PUB00ISB0TransportDevLV0final.pdf p. 1024. 104  |  Access to Land in South Asia: The World Bank Guidance Note Land governance for TOD in Jakarta A dynamic-actor network analysis tool helps build one of Asia’s largest public transit systems The Jakarta Metropolitan Area (JMA) has a population of 28 million and is growing at a rate of 1.47% per year. It has become a city of cities with poor connectivity between core business centers and industrial areas, with one-third of the region’s population living in Jakarta itself. In 2010, only 56% of commuter trips in Jakarta were by public transportation. As a result, the city, provincial, and central governments began the development of one of the largest public transit systems in Asia. By 2030, the Jakarta Mass Rapid Transit (MRT) system is expected to stretch across over 108 kilometers. As part of the Master Plan for the metropolitan region, 13 TOD special zones are planned; one of the largest multi-modal projects is around Manggarai Station, a large rail station in the southeastern part of Jakarta. The area surrounding the station contains a complex mix of land uses. An old neighbourhood, with mature street trees along the roadside, lies on the northern part of the Manggarai area. Other areas are covered by mixed land uses, including government offices, trade and services, settlements, and other public facilities. Some land assets are owned by the Post Office and the Indonesian Military Force (TNI). Developing integrated land use, public transport, and intermodal facilities at and surrounding the station represented a significant challenge. The key question for the project was what kind of TOD governance arrangement should be designed to bring together the project’s many stakeholders, particularly for land use and acquisition. The project faced problems affecting stakeholders in achieving their goals, priorities, and interests. A dynamic actor-network analysis (DANA) tool was developed to bring together the various stakeholders to sort out competing interests and land acquisition requirements necessary to meet the project’s needs. The DANA is a systematic presentation method that can assist in capturing and resolving the complexities of cognitive and political issues involved in the design of TOD projects. It was instrumental in determining the landholders and other stakeholders involved in the project, their vested interests, the mobilization of resources, and the formulation of land-use policy and acquisition. Source: For more detailed information on this case study, see Dirgahayani, P., Syabri, I. and Waluyo, N.P. (2015). “Land Governance for Equitable Transit Oriented Development in Densely Built Urban Area (Case Study: Jakarta, Indonesia)”, Transportation Research Board 94th Annual Meeting, Washington, DC, 17pp. set of issues and problems related to governance institutional framework and government environment arrangements that shape the design concept, goals, are essential50. objects, actions, and expected project outcomes. In the case of TOD projects, these problems are often not 7.13 Multiple Agencies Responsibility addressed comprehensively or sufficiently early in the project design47. for Land Associated with TOD A diverse set of stakeholders is often responsible for In fact, land governance for TOD projects is a subject conferring and managing rights on the use, purchase, that is not well documented. The World Bank has and sale of land and property linked to TOD projects. investigated this48: “Land governance is about the These responsibilities often fall to various ministries decisions made about access to land and its use, how and agencies at multiple levels of government, as well these decisions are implemented and enforced, and the as public and private organizations. This can result in way that competing interests in land are managed”49. overlaps, and sometimes conflicts, in responsibilities To successfully implement TOD projects, a supportive between public agencies, which may have conflicting 47 Searle, G., Darchen, S. and Huston, S. (2014). “Positive and Negative agendas and different levels of political power. Factors for Transit Oriented Development: Case Studies from Brisbane, Therefore, governments involved in TOD projects Melbourne and Sydney”, Urban Policy and Research, 32(4), pp. 437-457. must have a clear set of functions, mandates, and 48 Deininger, K., Selod, H. and Burns, A. (2012). The Land Governance Assessment Framework: Identifying and Monitoring Good Practice in the 50 Dirgahayani, P., Syabri, I. and Waluyo, N.P. (2015). “Land Governance Land Sector, The World Bank, Washington DC for Equitable Transit Oriented Development in Densely Built Urban Area 49 Antonio, D. (2018). “Land Governance: Catalyst for Sustainable Urban (Case Study: Jakarta, Indonesia)”, Transportation Research Board 94th Development”, Urbanet, 2 August 2018 Annual Meeting, Washington, DC, 17pp. 7. Access to Land in Transit-Oriented Development  |  105 organizational responsibilities that are well-defined by Institute53 also found the primary cause of project legal, policy, and administrative instruments, as well as failure was a lack of clearly defined objectives and coordination arrangements so that conflict resolution milestones to measure progress, which was linked to processes are in place during the project design phase. poorly defined project governance arrangements and discipline in planning, implementation, and life-cycle Many problems related to land for TOD projects operation strategy. are linked to functional agency responsibilities and interactions. These include planning and strategy, land Few countries have well-developed and integrated administration and management, and structuring of land information and management systems where finance instruments used to secure land and fund the the functions, responsibilities, mandates, and other development and operation of TOD projects. These interests related to access and encumbrances on land functions can be spread across a range of public are well-documented. A more holistic assessment agencies and sometimes involve partnerships with of the life-cycle governance of projects is required to businesses and multiple levels of government. There address land access and value issues. can also be complex long-term leasing arrangements between agencies and state-owned enterprises. 7.14 Framework for Analyzing TOD Project governance arrangements for engaging Land-governance Functions and multiple stakeholders on land matters are often Responsibilities imprecise or poorly designed. There is an urgent need to improve governance structures and regulations There are six broad governance functions that require for gaining access to land by designing clear lines of careful consideration during the TOD project cycle to communication with the public and private sectors gain access to land: planning and strategy for land and ensuring acceptance and compliance with TOD acquisition, land rights acquisition, financing land fundamentals51. Design and construction requirements procurement, access during construction, services are inflexible to political, economic, technological, delivery, and access to land resources, such as water and budget management cycles, and there can be and materials. These can be mapped, and information problems in accommodating them. Planning and incorporated into the design and implementation of strategy assumptions and sectoral approaches to TOD projects. Many functions and responsibilities will setting project goals, planning, and strategy often do change or be transferred to other agencies and levels of not achieve targeted outcomes. government during the lifecycle of TOD projects. Mapping public agencies’ land management, There are also four broad operational elements of administrative governance reporting, and coordination land governance. Depending on the TOD project’s responsibilities is a complicated but essential part nature, these elements should consider the system of overcoming the many pitfalls associated with of government, laws, administration, customs, and engaging all responsible agencies and stakeholders practices in regions relating to access to land, and in the land acquisition or reassembling process for adapt accordingly. Many land governance functions and TOD projects. These difficulties were highlighted by responsibilities are often not considered with sufficient a case study that analyzed the construction of Delhi’s care during the project cycle’s concept and project airport metro express52. The Project Management information document (PID) preparation phases. 51 Ollivier, G., Ghate, A., Bankim, K., and Mehta, P. (2021), Transit-Oriented Mandates: These requirements are imposed on Development Implementation Resources and Tools, 2nd Edition, Global Platform for Sustainable Cities, The World Bank, Washington, DC. public and quasi-public agencies and are delegated 52 Li, X. and Love, P.E.D. (2019). “Employing land value capture in urban rail transit public private partnerships: Retrospective analysis of 53 Pulse of the Profession 2017. (2017). Success Rates Rise: Transforming Delhi’s airport metro express”, Research in Transportation Business & the high cost of low performance - 9th Global Project Management Management, 32, p. 100431. Survey, Project Management Institute, Pennsylvania 106  |  Access to Land in South Asia: The World Bank Guidance Note to authorities and other bodies or organizations assembly or acquisition of many parcels of land along for the conduct of public business concerning the dedicated transportation and utility corridors, as well formulation and implementation of policies related to as transportation hub interchanges and nodes. Unlike land management and services. These requirements projects related to housing, solar energy, or public need identification and careful research during TOD utility sites for water and waste water management, conceptual design as they have a significant impact on there are often hundreds of small parcels of land to be project design, cost, and implementation. acquired or adjusted to build a project. All land in the dedicated TOD corridor must be secured by acquisition, Organizations: The names, structure, and reporting exchanged, or pooled through different arrangements. lines of organizations and agencies, including subsidiary bodies and public and private delegates, Dealing with many tracts of land, ownership, and legal responsible for decision-making to deliver public covenants significantly affects the time and cost of goods linked to land services for projects. These gaining access to land for TOD projects. Issues related agencies and organizations are linked to multiple to absentee ownership, disputes, overlapping rights levels of government and jurisdictions, and overlapping and claims, and unforeseen legal impediments occur functions and responsibilities are common. less often with utility projects that involve larger parcels of land with less complex tenure issues. Processes: The procedures, practices, and courses of action for implementing policy and administrative Many TOD projects have experienced significant work tasks to deliver land, products, and services litigation around land issues post-construction54. for TOD projects. These processes may include These issues relate to land acquired or impacted by the planning, project management, financial and project’s construction, which often continue to arise resource management, procurement, monitoring, and well after the project is completed and operational. evaluation. Many processes operate independently, Claims can relate to unforeseen impediments imposed which makes concurrent processing of access to land upon land markets and the unrealized potential of issues difficult, expensive, and time-consuming. land value capture, as well as disputes related to Capacities: These are the human resources, equipment, compulsory acquisition, including detrimental effects infrastructure, technologies, finance, and information on land not taken. Incomplete documentation and available to perform governance functions concerning non-compliance with planning, legal, development land to support the design and implementation of TOD approval, restoration, and compensation involving non- projects. Many agencies and organizations involved monetized matters can also lead to post-construction with TOD projects suffer from a shortage of resources, land disputes. These factors can impose substantial funds, and skills to handle land issues. This challenge ongoing operational costs and impact the viability of can be overcome by creating land administration teams TOD projects55. or resource-sharing arrangements of staff, information, South Asian countries experience significant litigation and technology. on issues related to the land in the post-project Establishing a land governance management system is construction phase. These disputes either do not crucial for TOD projects, and a significant issue facing proceed or take a long time to be addressed by the court many projects in SAR. system56. There are few documented case studies of 54 Renne, J.L, Bartholomew, K. and Wontor, P. (2011). “Transit- 7.15 Added Complexity of Gaining Oriented and Joint Development: Case Studies and Legal Issues”, Transit Cooperative Research Program Legal Research Digest, 36, Transportation Research Board, Washington DC. Access and Assembly of Land for 55 Renne, J.L, Bartholomew, K. and Wontor, P. (2011). “Transit- Oriented and Joint Development: Case Studies and Legal Issues”, TOD Projects Transit Cooperative Research Program Legal Research Digest, 36, Transportation Research Board, Washington DC. TOD projects are different from most other projects 56 TCRP, Transit-Oriented and Joint Development: Case Studies and Legal Issues, in Legal Research Digest 36. 2016, National Academy of associated with access to land. TOD projects require the Sciences, Transit Cooperative Research Program Washington, DC. 7. Access to Land in Transit-Oriented Development  |  107 court rulings57. Citizens’ income and socio-demographic Requirements for Effective Land factors severely constrain their access to the legal Administration and Management system to bring litigation against project proponents. Disputes can result in those affected taking the law yy Land Records Data Management into their own hands, resulting in demonstrations, civil yy Land Appraisal disobedience, and physical violence. Nevertheless, yy Land-Use Planning there is growing evidence that litigation on access to yy Place and Character Issues land is becoming an increasingly frequent occurrence in yy Land Assembly Process Asian infrastructure projects such as the Mega Manila yy Integrated Planning Approval Subway Project58 and Special Purpose Vehicles for yy Public Institution Capacity Building Land acquisition on the Delhi Metro59. These disputes yy Land Development highlight the importance of future TOD projects in the yy Infrastructure Agreements region considering possible post-construction access to land issues. it is essential that governance arrangements for land 7.16 Land Administration and administration are in place at the commencement of a project to prevent delay or abandonment due to a Management Requirements for failure to secure legal, physical, and cultural rights and Access to Land for TOD access to land. Land administration is the process of establishing The World Bank’s recent report on Managing property rights and tracking information about the Urban Spatial Growth: World Bank Support to Land ownership and value of the land. It enables the Administration, Planning, and Development61 offers functioning of land markets. Land-use planning is the useful guidance on establishing land administration allocation of land for private and public uses, including systems to manage access to land for large projects. infrastructure and services. The following are important requirements for effective land administration and management to gain access to Good planning to address land administration and land for TOD projects. management issues associated with land access is a prerequisite for successful TOD project delivery. These processes should be an integral part of project Land Records Data Management Systems design and implementation and should be used as The World Bank has focused for many decades on trigger mechanisms for many other aspects of project the need for countries to develop fully functioning design to warn of potential delays. Research60 shows land record data management systems. However, 57 Mason, J. et al. (2022). Transit-oriented development: Case studies many countries still do not have well-functioning land report: An Assessment of Six Settlements and Interventions in East Africa and India, Institute for Transportation Development and Policy, administration and data record management systems. New York. Retrieved from https://transport-links.com/download/ When land records systems are poor, it may be necessary transit-oriented-development-case-studies-report/ 58 Japan International Cooperation Agency. (2015). Information Collection for TOD projects to build an independent system for land Survey for the Mega Manila Subway Project in The Republic of The records and data management. This can be expensive Philippines, Department of Transportation and Communication, Government of the Philippines but, without it, projects will likely experience significant 59 Li, X. and Love, P.E.D. (2019). “Employing land value capture in urban difficulties in dealing with land administration and rail transit public private partnerships: Retrospective analysis of Delhi’s airport metro express”, Research in Transportation Business & management matters. Gaining access to public records Management, 32, p. 100431. 60 Bajracharya, B., Khan, S. and Longland, M. (2005). “Regulatory and 61 Independent Evaluation Group. (2021). Managing Urban Spatial Incentive Mechanisms to implement Transit Oriented Development Growth: World Bank Support to Land Administration, Planning, and (TOD) in South East Queensland”, in Troy, Patrick (ed), Proceedings of Development, The World Bank, Washington, DC. Retrieved from the 2nd Bi-annual National Conference on the State of Australian Cities, https://openknowledge.worldbank.org/entities/publication/1c606456- Nov 30 - Dec 2 2005, Brisbane. 18c0-58b4-9fba-7f2a7761b41f 108  |  Access to Land in South Asia: The World Bank Guidance Note Bangladesh Khatian records. Mika Törhönen can be extremely difficult and expensive, such as in potential locations for corridors, access routes, and Manila, where land registry records management TOD infrastructure. The coverage information collected was privatized. Often the quality of records is poor or for more detailed feasibility studies will more than likely information is missing, which will require extensive extend beyond these potential requirements to enable field investigations and inquiries to establish rightful adjustments to alignment, design, and land use for a ownership of some parcels of land. range of development purposes. Land access needs can be determined from this analysis and, if necessary, Land Assessment further research requirements can be identified. All TOD projects require a systematic assessment of the Land-use Planning physical, legal, and administrative attributes of land, as well as other features that may be required for project World Bank interventions related to land-use regulation, purposes. This work can be done by satellite and drone spatial planning, and enhancing the capacity of planning imagery using remote sensing and fieldwork to collect agencies have generally been effective62. However, TOD information on plot sizes, land use, construction, site 62 Independent Evaluation Group. (2021). Managing Urban Spatial coverage of structures, and other land uses. In many Growth: World Bank Support to Land Administration, Planning, and cases, prefeasibility studies will have determined Development, The World Bank, Washington, DC. 7. Access to Land in Transit-Oriented Development  |  109 Dhaka, Bangladesh. New Khatian record service center. Mika Törhönen projects may experience significant challenges related heritage status, which may require sensitivity in to sustainability and integration of land-use planning handling access to land issues. Archaeological and development. Building infrastructure without exploration sometimes may be necessary, which could corresponding land-use planning creates a substantial reveal significant issues with sites and preclude them impediment to managing urban spatial development from use by TOD projects. Consultation should take growth. Most TOD projects should be accompanied by place on legal, common law, and cultural rights to regional and local area integrated economic, land-use, places and spaces affected by TOD development at all and transportation plans. These are important as they times. set the parameters and assumptions underpinning the design and development of TOD projects and their Land Assembly Process access to land needs. The land assembly process for TOD, especially large- Place and Character Issues scale projects, is complicated and protracted. The most effective way of managing land assembly is People develop an affinity for places and spaces in to create a system of bundling parcels of small land which they live. In some cases, these have cultural packages so land access rights can be systematically 110  |  Access to Land in South Asia: The World Bank Guidance Note Ahmedabad’s modern Bus Rapid Transit System Successes and challenges of a TOD project to curb urban sprawl Ahmedabad introduced a modern Bus Rapid Transit System (BRTS) called ‘Janmarg’ to curb urban sprawl by promoting a compact city structure, with higher densities in zones with good access to public transit. The city’s development plan emphasizes mixed land use, high densities, public transportation, a grid-based pedestrian circulation network, and a market-driven land-use approach to developing its central business district (CBD). While the project has been successful, it still faces issues with transit and land-use integration, connectivity, and adequate pedestrian infrastructure caused by access to land issues. These issues were caused in part by poor local area land-use planning around station development. An important post-construction finding on the BRTS’s feasibility was that a proper evaluation of TOD projects should be conducted using a mix of quantitative and qualitative methods – especially in dealing with access to land matters. One study found the absence of quantitative analysis makes it impossible to produce a measurable and reproducible assessment that can be used to make judgments about the quality of TOD in different stations. Source: Ahmedabad: An incremental and progressive approach to Bus based TOD, in Transit Orientated Development for Indian Smart Cities. 2016, National Institute for Urban Affairs: New Delhi. and sequentially acquired or transferred if needed. A professionals within public institutions and agencies. significant issue associated with the land assembly Many officials have not received continuing process is holdouts, which occur when individual professional development training in new technology owners or occupiers refuse acquisition, engage in and management systems. TOD projects need to litigation to prevent the acquisition of land rights, or provide resources for capacity building so authorities seek higher compensation for land needed for a TOD can process a large number of legal and technical project. Where possible, these properties should documents related to land matters, especially transfers be identified by a special legal team to deal with the and approvals. In some cases, it will be necessary to litigation process. build institutional capacity to geocode and document data and information to improve project management, Integrated Planning Approvals System especially on large-scale projects. SAR countries feature highly segregated management Land Development and administration systems of granting planning and development approvals related to land. Most The impact of urban transport on land use and land development approvals are handled sequentially, and development depends on the fit between improved many still use paper document files. TOD projects local and regional networks and corridors of require integrated departmental and agency electronic transportation and the urban areas they serve. There systems, allowing concurrent and transparent is a need for systematic data recording of the locations approvals for the efficient management of land matters. of potentially developable land and investment In some cases, this may require changes to laws or projects as part of LAM project infrastructure. A regulations, as well as training to enable professional prerequisite of TOD projects is the development of staff to simultaneously process necessary approvals an overall vision, supported by detailed planning and for development, planning, and land transfers. extensive land-use mapping, of areas or parcels of land which may be expected to undergo transformations Capacity Building of Local Councils and or redevelopment after projects are completed. It is important to assess potential value capture Public Institutions and identify the need for strategic infrastructure TOD projects in SAR face significant knowledge and investment requiring additional land access to service skill shortages, particularly among senior management these developments. 7. Access to Land in Transit-Oriented Development  |  111 Infrastructure Agreements preparation documents. All sizeable TOD projects need a structured approach to identifying, assessing, Integrated regional development plans may provide and controlling land management risks that could a basis for establishing infrastructure agreements emerge during a project’s life cycle, though smaller between the State or provincial government and scale projects can use a more simplified approach. developers or landowners63. While public authorities In conducting risk management assessments, it is invest in infrastructure to guide development, essential to build trigger response mechanisms for landowners and developers who benefit from these known, possible, perceived, and unknown risks – for investments may be required to reciprocate by example, resolving access to rent control tenancy contributing to infrastructure. The benefits resulting protection rights in India65. Projects need to consider from infrastructure investments need to be defined to contingency planning, take care to address high- determine the level of contribution required from each probability events related to land access that could landowner or developer. It may prove difficult to achieve adversely impact a project, and identify the potential consensus on the extent of benefit attributable to impacts of low-probability, high-impact events. specific infrastructural investments, but those benefits need to be clearly defined and equitable. Checkpoints relating to access to land helps TOD projects identify risks and potential trigger points. These are markers or control points used to monitor 7.17 TOD Project Access to Land project performance and surveillance. They are valuable Checkpoints and Triggers for identifying potential cumulative causation risks, changes, or opportunities to add value or fast-track TOD projects require team management governance project components as implementation proceeds. They efforts to scrutinize issues that can potentially derail can be used to monitor potential impacts that delay a project. The circumstances, events, or conditions in the acquisition or securing of rights and approvals and the life cycle of projects when management needs to what effect they may have on project progress and activate contingency action to mitigate the risk of a cost overruns. They also provide a basis for reflection, project component’s failure are known as trigger points. analysis, and evaluation to determine whether the This may involve requests for additional information or project is proceeding as planned. An important feature resources, a change in design, or, at worst, delay or of Singapore’s TOD success is its system of tight controls abandonment of the project. Trigger points on access to and checkpoints in the overall planning process66. land may require a judgment call to maximize the value of the predetermined contingency by implementing it TOD projects often give insufficient attention to at the optimal time. broader external events affecting land access during project design and preparation. Certain events or Good project governance on access to land should conditional requirements will trigger the need for ensure that risks are constantly monitored. The World responses to adjust the proposed design of a project. Bank Public Investment Management Reference For example, where land along a corridor is discovered Guide64 outlines steps for including land governance to be contaminated or vulnerable, it may need to risk assessment in Project Investment and PPP-type be treated or excluded from a project, potentially 63 Bajracharya, B., S. Khan, and M. Longland, Regulatory and Incentive causing significant delay in gaining access to a site Mechanisms to implement Transit Oriented Development (TOD) in South East Queensland, in Regulatory and Incentive Mechanisms to Implement TODS 2005, Queensland Government: Brisbane. 65 Lakshminarayanan, A. (2017). “What are the rights of a tenant under 64 Kim, J.-H., Fallov, J.A. and Groom, S. (2020). Public Investment the law?” The Hindu, New Delhi. Management Reference Guide, International Development in 66 Salimbene, F.P. and Wiggins, W.P. (2020). “Transit-Oriented Practice, The World Bank: Washington, DC. Retrieved from https:// Development: The Quest for Sustainable Cities in the Age of the openknowledge.worldbank.org/entities/publication/99c14858-9bf8- Automobile”, William & Mary Environmental Law and Policy Review, 53e3-8fa3-67bd9b46610f 45(1): p. 50. 112  |  Access to Land in South Asia: The World Bank Guidance Note Table 7.2: TOD project Land Governance Checkpoints and Triggers on Access to Land Function Preparation Implementation Completion Action or Triggers checkpoint Planning and Strategy Definition of the  Area of land for project phases identified project area Land identified  All land parcels included in the project identified Land use status  Land-use status checked against land-use plans Land suitability  Determination of suitability of all parcels of assessment project land, and whether alternative/extra land should be acquired Consultation and    Stakeholder consultation and engagement engagement program from project purpose, design, impact, and inputs Impact assessment  Assessment of catchment service area, project impact (economic, social, environmental) Resettlement   Resettlement and relocation plan and strategy Land Procurement Tenure audit  Audit of land and property tenure to flag list of issues (ownership, lease, rental, customary) Valuation   Mass appraisal of land and property value assessment Procurement   Land and property free market purchase, arrangement negotiation, compulsory acquisition, exchange Sequencing of land   assembly Finance Spatial budgeting   Financial plan for sequential land purchase plan and adjustment transactions Design and Construction Geotechnical   Complete pre-PAD geotechnical studies to studies identify issues with land that may affect adjacent properties, planning and acquisition, and construction costs Access to sites,    External project works are required to improve nodes, and access to TOD nodes, and corridor station corridors stops/transfers Provision of land   Opportunity costs of acquiring land for for co-location of co-location of services and facilities. Land services access and maintenance agreement Provision of land    Agreements of land access for services easements connections of various utility agencies and service providers 7. Access to Land in Transit-Oriented Development  |  113 Function Preparation Implementation Completion Action or Triggers checkpoint Services Delivery Land services    Land needed for connecting services to connections support the operations of TOD are identified and secured Emergency access    and evacuation Assessment Impact assessment    Progressive documentation and assessment of the impact of the project on land use, property values, and access to public space Social assessment   Evaluation of resettlement impacts Management Land management   Integrated land information systems for information system monitoring public agency approvals related to pre- and post-construction Land procurement   Real estate real-time property procurement management monitoring and evaluation performance review program Resettlement    Staging of resettlement Land litigation   process and procedures Source: Author or parcel of land. Attention should be given to climate preparation, implementation, and post-completion change events linked to TOD projects that affect land phases. Specific triggers need to be identified, such as erosion, access to construction sites, or, in some the percentage of land acquired before construction, cases, the capacity to develop land. Care should be preliminary geotechnical studies to determine taken to ensure that land being taken or used for TOD corridor route alignment and construction design, and projects does not cut off access rights to upstream or systematic documentation of encumbrances that may downstream land following construction. hold up securing settlement of the procurement of land. A common reason for TOD project failure is the lack of 7.18 Value-adding Access to Land a systematic decision-making framework with checks and balances to integrate elements of governance. Access Initiatives for TOD Projects Table 7.2 shows a framework of checkpoints and triggers One of the most important objectives of TOD projects is built into access to land governance arrangements for to improve land access and open land for development, TOD projects. The symbols represent critical trigger redevelopment, or regeneration opportunities. TOD points for the preparation, implementation, and post- projects provide a catalyst for realizing development completion phases of TOD projects. A framework such opportunities, but the process must be managed as this should be considered carefully during the carefully. There are innovative ways to strengthen 114  |  Access to Land in South Asia: The World Bank Guidance Note TOD project design through value engineering, value information related to land-use approvals, building capture, and other creative solutions for assembling and construction permits, and environmental and and holding land, implementation, and post-completion other related approvals. In addition, many other operations to improve access to land for development. documented and undocumented public and private Not all of these are universally applicable to SAR, but rights must be meticulously identified and recorded, some good practices could be adopted on a country- primarily related to tenancy and occupation. Several by-country and city-by-city basis to improve access countries have made major strides on this issue: and assembly of land to improve investment returns Australian states and territories have established a for TOD projects. range of integrated inter-agency development approval and land acquisition systems for TOD and climate Establishing electronic information systems for change related projects and Singapore employs one collecting and analyzing land data and development of Asia’s most advanced systems for dealing with approvals improves the efficiency of TOD projects67. integrated land management and assembly for TOD Hundreds of covenants, service easements, and projects68. liens on land may need to be annulled, modified, or transferred during TOD projects. These are The current TOD land planning, management, and usually recorded on documents stored in separate development control system in South Asia involves departments and agencies or held privately. Successful sequential approval processes, with relevant procurement and amalgamation of land assembly for documents passed from agency to agency for approval. TOD requires substantial information to be collected Establishing an integrated and electronic approval and stored on an integrated shared-document land assessment system enables relevant agencies to management information system. concurrently approve necessary applications. Such systems operate very efficiently in Singapore, Australia, The administrative process associated with land and New Zealand, and could be adopted quickly on a administration and management of TOD projects project-by-project basis to manage all land matters for would be greatly enhanced by a wide range of TOD projects. Australia’s success with integrated development approval How modernized systems reduced delays and benefited large TOD projects Australian states and territories began introducing integrated planning and development approval systems in the 1990s to ensure more coordinated delivery of public goods and services. The integrated development approval (IDAS) significantly reduced the delays in gaining necessary approvals and land acquisition for public and private sector and PPP development projects. Formerly, approvals for the development and purchase of land for public projects involved a time-consuming linear agency approvals process. In the early 2000s, state governments introduced a one-window integrated development approval process used widely for large TOD projects. The Victorian State Government developed an extensive system that can be integrated with the Federal Government’s assessment process. An extensive range of online materials is available for integrated planning, land use, acquisition, and development approvals. The State of Queensland, Australia, also has a well-developed system for integrating land management and approvals for biotechnology, cleaner energy, and TOD projects. This is currently being used for approvals and land acquisitions for the $US4.5 billion Metro Cross River Rail TOD project, which will see a new underground rail link built under the Brisbane River and the central business district. 68 Yang, P. (2009). “An Asian model of TOD – the planning integration and institutional tools in Singapore”, in Curtis, 67 Kamruzzaman, M., et al. (2014). “Patterns of social capital C., Renne, J. and Bertolini, L. (editors), Transit-Orientated associated with transit oriented development”, Journal of Development: Making It Happen, Ashgate Publishing, Transport Geography, 35, pp. 144-155. Aldershot, UK, pp. 91-108. 7. Access to Land in Transit-Oriented Development  |  115 Los Angeles Metro’s land banking program Acquiring land to mitigate gentrification and displacement around transit lines The Los Angeles County Metropolitan Transportation Authority (Metro) has begun implementing a new land banking program to mitigate gentrification and displacement around future transit lines. The program follows similar initiatives in Denver and Atlanta to provide low-income housing for those displaced by TOD projects. The model includes a Land Bank Authority to identify and oversee the evaluation of suitable land for displacement and enter into agreements for direct acquisition, community acquisition, and public agency acquisition partnerships. The land bank has the authority to secure land and facilitate interim uses, provide entitlements for the planning of housing or other community projects, and develop housing. Source: County of Los Angeles. (2022). Establishing a Land Bank For Los Angeles County, Los Angeles, California. Retrieved from https://file.lacounty. gov/SDSInter/bos/supdocs/169812.pdf TOD projects can provide a catalyst for building Securing access to land for TOD projects also requires improved integrated planning and development securing a land surplus to enable land exchanges, approvals for land management and administration. particularly when associated with resettlement. Land They can be added as a supplementary sunk cost item Banks can assist in the process of securing and holding to TOD project management at minimal cost. The cost of land, while providing for temporary-use leaseback these systems’ creation can also be incorporated as an until the land is needed for the project’s construction. offset in project cost recovery, which should generate Land banking would thus help ensure the security and increasing returns on investment once regeneration protection of corridors to enable projects to proceed and redevelopment occur within and adjacent to TOD according to schedule. corridors and station hubs. 7.20 Conclusion 7.19 TOD Land Banks TOD is an increasingly popular development strategy TOD projects often face challenges with land assembly due to its potential to promote sustainable urban and acquisition as the land near transit sites tends to development. It is a feasible option for developing be expensive and scarce. For this reason, the report on and revitalizing cities in South Asia and has been Infrastructure Financing Options for Transit Oriented employed in developed Asian countries, such as Japan Development notes69, “communities’ interest in and Singapore, as well as the region’s developing [land banks’] applicability to TOD has been growing economies, particularly India. However, like in other because they are used to acquiring property and are parts of the world, TOD faces significant challenges in often linked to a social mission, such as neighborhood gaining access to land to build infrastructure that will stabilization or affordable housing.” While land banks improve urban and regional plans and services. have not been used for assembling developable land in station areas in South Asia, they have been used in Land issues related to TOD are more complex than single the United States. If applied to South Asia, they could entity or site projects, as they may involve the acquisition make TOD and associated infrastructure projects more or purchase of hundreds of small properties. This section feasible. has identified the issues and challenges with applying the TOD model and has focused on access to land and value capture in the design and implementation of these 69 Environmental Protection Agency. (2013). Infrastructure Financing Options for Transit Orientated Development, United States projects. The core problem and issues affecting land Environmental Protection Agency Washington, DC. p. 251. Retrieved for TOD projects are multi-sectoral and involve many from https://www.epa.gov/sites/default/files/2014-02/documents/ infrastructure_financing_options_for_transit-oriented_development.pdf functional areas of responsibility and jurisdictions. 116  |  Access to Land in South Asia: The World Bank Guidance Note Documentation of organizations, their mandates, Triggers provide options for actions to address events, responsibilities, processes, and capacities to deliver on circumstances, or risks that can potentially impact the the TOD land requirement inputs and outputs is crucial successful completion of the project. Triggers may for successful project implementation. This chapter also require a change of strategy or, in the worst case, presents functions and arrangements of responsibilities project termination. involving land for TOD projects. These functions relate An underlying principle of TOD is that it creates to planning and strategy, acquisition of land, securing opportunities for investment and value-adding along land and property, finance, design and construction, transit corridors, transportation hubs, and nodes. This services delivery, and resources management. chapter outlines several options for adding value to TOD project management should implement a system TOD projects linked to improved land management, of triggers and checkpoints and monitor these closely including establishing transit development authorities, to address risks and other factors that may impact integrated planning and development approval successful project implementation. Checkpoints systems, co-location of services, pooling land resources are crucial staging points for monitoring progress. and funding, and bundled project finance. Solar park number 14 in Rewa Stills, India. Surbhi Goyal 7. Access to Land in Transit-Oriented Development  |  117 8 Access to Land for Renewable Energy Investments Access to Land for Renewable 8.  Energy Investments also undergo inundation or degradation as a result of 8.1 Background70 climate change, making them unsuitable for cultivation C ountries will need to employ vast tracts of land to realize the climate actions to which they committed at the COP26. Large swathes of land will or habitation. These factors, combined with rapid urbanization, will result in an unprecedented demand for land in the coming decades. In order to meet their Table 8.1: Renewable Energy Plans by Country Renewable Energy Targets or Plans Land Requirement India India has committed to achieve net zero by 2070. By 2030 50,000 km2 for Solar Park and 15,000 km2 for Its goal is to generate 175 GW in RE by 2022 and wind farms. 450 GW by 2030. Bangladesh The country’s National Solar Energy Action Plan By 2041 4,000 km2 of land for solar parks. targets as a medium case scenario to generate 31 percent of its energy needs from solar by 2041. This would constitute 25 GW of solar capacity. Afghanistan - A World Bank study determined that large areas in the south and southwest could supply upwards of 20,000 MWh per year of solar electricity. Bhutan Bhutan plans to have 5 GW hydro generation 4 km2 for solar and less than 1 km2 for wind. capacity by 2030. It plans to build a 30 MW solar energy plant in Shingkhar, Bumthang district. The Maldives The Maldives has committed to reach net zero by - 2050 and plans to meet 50 percent of its energy needs through RE by 2030. Nepal As part of its Nationally Determined Contributions Assuming 10 percent of target RE through solar and under the framework of the Paris Agreement, wind – land requirement will be 150 -200 ha. Nepal has set up a target to expand clean energy generation to 15,000 MW of which mini- and micro-hydropower, solar, wind and bio-energy will generate 5 to 10 percent of that total.701 Sri Lanka The country plans to generate 70 percent of its 4,500 km2 for solar and wind – approximately 40 GW of energy needs from RE sources. 7 percent of the total area of the country. Sources: Joshi, M., Palchak, D., De Silva, T. and Stephen, G. (2022). Reliability and resiliency in South Asia’s power sector: Pathways for Research, Modelling, and Implementation, National RE Laboratory, Washington DG. Retrieved from https://www.nrel.gov/docs/ fy22osti/81826.pdf; World Bank. (2018). Afghanistan RE Development: Issues and Options, The World Bank, Washington DC. Retrieved from https://openknowledge.worldbank.org/server/api/core/bitstreams/9f1578ed-6dfe-5d27-8594-c6f3ada198ac/content; respective country energy policy documents from various sources 70 Sagarika Bhatta. (2021). “Phasing out fossil fuel: Where does Nepal Stand?” Nepal Live Today, 13 May 2021. Retrieved from https://www.nepallivetoday.com/2021/05/13/phasing-out-fossil-fuel- where-does-nepal-stand/ 8. Access to Land for Renewable Energy Investments  |  121 Solar Park command room construction in Sonagazi, Bangladesh. Mika Törhönen COP26 commitments, countries will need to employ acquisition and land use repurposing. In many comprehensive land information, valuation, and countries, the success of meeting RE goals will administration to improve access to land. hinge on accessing suitable lands in a manner that is socially responsible, timely, and legal. Lack of access The construction of major RE projects, which will to suitable land has often constrained and been a be required for countries to meet their COP26 source of costly delays for RE projects. For example, commitments, will entail major reforms in the energy problems related to land acquisition are a key factor and land sectors. This chapter offers guidance to in Bangladesh’s failure to reach its goal of generating World Bank TTLs on how to support client governments 10 percent of its total electricity from renewable as they strive to deepen their reliance on RE. The sources by 2020; only 3 percent has been achieved chapter highlights the success stories and roadblocks thus far.71 experienced by several South Asian countries and provides a decision-making framework to help teams Many private investors in Bangladesh’s solar projects identify and acquire the most suitable land for RE have failed to acquire the required land, particularly projects. Finally, it concludes with broader land policy when it is privately held72. These difficulties, coupled recommendations to ensure countries can meet their with the country’s larger land shortage issues, COP26 targets. 71 Ministry of Power, Energy and Mineral Resources (2008). RE Policy of South Asian countries’ transition away from coal Bangladesh, Government of Bangladesh. Retrieved from https://policy. thinkbluedata.com/sites/default/files/REP_English.pdf and towards RE production requires massive land 72 The Business Standard, 18 May 2022, Dhaka, Bangladesh. 122  |  Access to Land in South Asia: The World Bank Guidance Note has prompted companies to buy up land before learning 1 GW, a solar farm would need between 45–75 square if the site is truly suitable for a specific project.73 miles (116–200 km2) of land. Wind farms require even India has experienced similar challenges with land more land because the wind turbines need to be acquisition: In the three states where the majority of RE spaced far apart, and thus a 1 GW wind farm would projects are underway, “competition for suitable land require between 260–360 square miles (670–930 km2). with high wind speeds and grid connectivity has grown Major hydro-electric power generation schemes can intense, making land acquisition in a timely manner an require the flooding of substantial areas of land and arduous task for developers.”74 the displacement of settlements. Land demands can be mitigated in some cases by the potential for multiple The land requirements for RE projects can vary uses of the sites. dramatically. Nuclear energy, for example, requires minimal amounts of land: A typical 1 GW nuclear power Most countries plan to use a combination of RE sources plant needs 1.3 square miles (3.4 km2) of land. Solar, to achieve their targets. In India, where the government on the other hand, is more land intensive: To generate has proclaimed a target of net zero by 2070, the 73 Islam, Syful. (2022). “Solar developers buying up land in Bangladesh.” government estimates that it will need roughly PV Magazine, 26 May 2022. Retrieved from https://www.pv-magazine. 50,000-75,000 km2 for solar and 15,000-20,000 km2 of com/2022/05/26/solar-developers-buying-up-land-in-bangladesh/ 74 Saji, S., Kuldeep, N. and Tyagi, A. (2019). A Second Wind for India’s land for wind. In contrast, Bangladesh has chosen to Wind Energy Sector: Pathways to Achieve 60 GW: Policy Brief, Council rely more on solar, estimating that it will need 4,000 km2 on Energy, Environment and Water, New Delhi. Retrieved from https:// www.ceew.in/sites/default/files/ceew-study-on-indias-wind-energy- of land for solar parks. sector-scenarios-17July19.pdf River island in Jamalpur, Bangladesh, considered for becoming an RE site. Mika Törhönen 8. Access to Land for Renewable Energy Investments  |  123 Bhadla Industrial Solar Park’s successful land acquisition process A large-scale, well-designed solar project reaps significant rewards The Bhadla Industrial Solar Park, which generates 2,245 MW of energy, demonstrates how large-scale solar park projects can be implemented successfully. It is one of India’s largest solar parks, extending over 6,000 ha, and has obtained record- low tariffs through some competitive auctions. Projects at the solar park were developed by multiple companies through public-private partnership. Rajasthan Solar Park Development Company Limited (RSDCL) was established as a Special Purpose Vehicle (SPV) in the form of a subsidiary company to a state government agency and was tasked with the formulation of guidelines for land allotments to various private producers. The project was developed in four phases. The first and second phase were completed by RSDCL, resulting in seven solar power plants (total 75 MW capacity) and 10 solar power plants (total 680 MW capacity), respectively. The third phase was developed by Saurya Urja Company of Rajasthan, a joint venture company of the Government of Rajasthan and IL&FS Energy Development Company (total 1,000 MW capacity). The fourth phase is being developed by Adani Renewable Energy Park Rajasthan, a joint venture between the Government of Rajasthan and Adani Renewable Energy Park (500 MW capacity). Land for the project was sourced by the government through purchase and negotiation. The site is in an arid region where large tracts of barren land were available, and nearly 90 percent was public land leased to solar park developers. Long- term leasing agreements were introduced to bypass the usual hurdles of valuation and compensation payment. The lease conditions also included a stipulation that 1 percent of total investment in solar projects will be reserved for local development under a special solar park development fund. The plant developer was also required to hire locals, preferably family members who were displaced due to the construction of the solar park. In government records, the bulk of the land for the site was classified as unoccupied “wasteland.” However, the project did run into some disputes about uses of the wasteland for grazing cattle and livestock, and promises made to the users of the land about jobs and compensation. The disputes related to some part of the land being ‘Khatedari’ - that is, under tenancy law – but the claimants did not have adequate papers to justify their claims. For a project spanning 6000 ha of land, such disputes were limited to small tracts of land of not more than 50 ha. Locals were also discontented because their expectations of employment at the plant were not fully met, as solar parks employ very few people. The Bhadla solar project demonstrates that it is possible to develop large-scale, well-designed solar plant projects. Land selection for the plant was based on the fact that large tracts of land were in public ownership and were fully acquired prior to being leased to project developers. For the small proportion of private lands, the solar park developers were encouraged to purchase through negotiations or pay lease rents. Upfront collection of development charges and lease rents enabled the state agency to provide the necessary infrastructure such as internal transmission lines, roads, and water supply and drainage systems. These demands will put pressure on land tenure, recognized in national land use frameworks. There is planning and permitting, and public asset management more progress with technical suitability analysis and systems.75 Despite an increase in photovoltaic site identification, but less with evaluating access affordability and popularity, large scale solar to land in terms of legal rights, stakeholders, social installations have lagged. Countries commonly lack inclusion, and risks. As countries transition away from standards and methods to identify, plan, pool, and coal plants towards solar or wind, they will increasingly allocate lands for RE projects, which are often not require the World Bank’s technical assistance and investment lending to strengthen their capacity to 75 The World Bank’s South Asia Region Working Group on Land (2021) identify suitable sites for RE investments and to secure identified access to land as a binding constraint to the WBG investments in the region. Specifically, the group identified multiple transmission access to land. line, solar park, and hydroelectric power projects, mass transit, road and railway corridors, and other infrastructure investments (as well The shift to harnessing RE will intensify competition as urban and environmental investments) that had been delayed or cancelled due to the government’s inability to acquire or access land. among various uses of land, such as agriculture, 124  |  Access to Land in South Asia: The World Bank Guidance Note forestry, and parks. The World Bank’s South Asia parking lots, highways, and even canals. Solar on Region Working Group on Land (2021) has highlighted rooftops and parking lots not only generate electricity how difficulties accessing land have already led to but also provide shade, without requiring direct land costly delays and cancellation of RE projects, and these use. Such projects are useful where land for RE is challenges are poised to escalate further. In India, difficult to obtain, and allow for multiple uses of the projects are commonly delayed due to challenges same land footprint. in identifying a parcel of land’s rightful owner. Often However, land-based PV farms often do need large landholders present claims on land, but they are either swaths of land, thereby competing with agriculture for contested or the legal land registration is missing due land allocation. Thus, meeting the National Determined to an unfeasible or unaffordable land registration Contribution targets and improving energy security process. through RE may also have adverse effects on food Due to recent technological advancements and supply security. While solar PV projects are typically sited on chain improvements, solar photovoltaic (PV) technology lands that appear “barren” on official maps, in reality is playing a key role in the transition to low-carbon they are sometimes used by villagers for growing economies. One of solar PV’s great advantages is its fodder or grazing their livestock. Government land modularity and flexibility. The increasing modularity records often do not identify such occupants, so when of solar PV allows for multiple environments for projects break ground, local residents are negatively installation. Solar panels do not need to be installed impacted and resist RE projects. The same challenge is on the ground, allowing for installation on a multitude repeating itself in the context of many land acquisitions of locations, such as homes, commercial buildings, for infrastructure investments. Solar park number 15 in Rewa Stills, India. Surbhi Goyal 8. Access to Land for Renewable Energy Investments  |  125 How Rewa solar park managed social and environmental risk The World Bank-financed project’s land assembly plan is a model for future developments The World Bank-financed Rewa Ultra-Mega Solar Limited in Madhya Pradesh, which produces 750 MW of solar energy, effectively managed social and environmental risks surrounding land acquisition through the WB’s ESF instruments. This project required around 1,500 hectares (15 km2) of land; the site chosen for it is a plateau where almost 80 percent of the land (approximately 1,320 ha) belonged to the government. This was important as India requires projects to obtain consent of 70 percent of landowners before the project can proceed. The site is mainly comprised of scrub or barren rocky land with limited potential for agriculture. The last 20 percent of land (273 ha) was purchased from private landowners under the state government’s “policy of mutual consent,” at double the guideline rate laid down in the policy. Only roughly 68 hectares of land was acquired from private landowners through negotiations. Tenders were invited only when the entire land parcel was held by Rewa Ultra Mega Solar Limited. The Rewa project is an example of how good project preparation, with a well-prepared land assembly and development plan, can reap significant rewards. The Ministry of New and Renewable Energy has recommended that other states in India use it as a model for its transaction structure. It is a recipient of the World Bank Group’s President’s Award for innovation and excellence and has been recognized by the World Bank-created Global Infrastructure Facility (GIF) for its optimal distribution of risks. Multiple teams within the World Bank were involved at different points on the Rewa transaction, and managing real and perceived conflicts of interest was paramount.” Sources: AECOM. (2016). Environmental and Social Assessment Report: 750 MW Solar Power Project, Rewa District, Madhya Pradesh: Final Report, AECOM India Pvt. Ltd, Gurgaon, Haryana, India. Retrieved from https://www.ireda.in/doc/writereaddata/ESARewaSolarReport_19_08_16_WB.pdf; http://rumsl.mp.gov.in/rumsl-about-us/; IFC. (no date). Rewa Solar (India): Removing Barriers to Scale, International Finance Corporation, Washington DC. Retrieved from https://www.ifc.org/wps/wcm/connect/b02cc29c-5105-4b32-9c71-ec723cf04367/scaling-infra-india-08. pdf?MOD=AJPERES&CVID=mSCUfFq 8.2 Developing RE in Land-scarce The Indian government has worked to capitalize on these benefits by launching a grid-connected rooftop Regions solar program that aims to provide incentives for Large RE projects are beset with land-related problems. residential, institutional, and social use. One stand-out They are often faced with a lack of suitable public lands success was the Surya Urja Rooftop Yojana of Gujarat. and regulatory and procedural issues in acquiring The incentive enabled Gujarat to achieve the highest private land. As a result, governments are increasingly cumulative rooftop installed capacity (approximately opting for decentralized options that can minimize 1.6 GW) among all the states. these challenges: In the states of Gujarat and Punjab, there are ’solar Rooftop solar plants and solar canals: Rooftop solar canals’ or solar panels over irrigation canals. This photo voltaic (RTSPV) systems have the advantage helps conserve water by reducing evaporation as well of being arranged in smaller configurations for local as generating electricity. Such innovative practices are use, and “can provide more accessible, affordable, useful in regions where suitable land for the RE project and reliable electricity options.”76 From 2006 to is not available. 2018, the installed capacity of the RTSPV has grown Solar wind hybrid park: Hybrid projects that combine globally from 2.5 GW to 213 GW, an 85-fold increase.77 both solar PV and wind turbines can yield up to twice the amount of electricity as either system working 76 IRENA. (2019). Solar simulators: Application to developing cities, International RE Agency, Abu Dhabi. alone.78 Such hybrid projects are feasible where 77 Joshi, S. et.al. (2021). “High resolution global spatiotemporal assessment of rooftop solar photovoltaics potential for renewable 78 Jervey, B. (2016) “Wind and Solar Are Better Together,” Scientific electricity generation”, Nature Communications, 12:5738 American, 5 December 2016, https://www.scientificamerican.com/ https://doi.org/10.1038/s41467-021-25720-2 article/wind-and-solar-are-better-together/ 126  |  Access to Land in South Asia: The World Bank Guidance Note River island in Jamalpur, Bangladesh, considered for becoming an RE site is currently a home at least for fishing, farming, dairy, sand digging and housing activities. Mika Törhönen suitable conditions for wind energy plants and solar PV technical and financial support to the park.80 There are plants co-exist. other similar projects underway in the region: Edotco Bangladesh, an integrated telecommunications One such solar wind hybrid park is being developed in infrastructure services company in Bangladesh, has the Indian State of Andhra Pradesh, which is expected built the country’s first-ever 75-meter long Hybrid to produce 120 MW of solar energy generation and solar wind Tower on a remote island located in the 40 MW of wind energy generation.79 The projected site northern Bay of Bengal.81 An Indian green firm, ReNew for the park is on government-owned barren land, of Power, has also commissioned Gujarat’s first wind- which 698 acres have been acquired and 200 acres solar hybrid project, which has a capacity of 17 MW, has yet to be acquired. The World Bank is providing 79 “Ramagiri Solar-Wind Hybrid Project – Battery Energy Storage System, 80 Stocktaking of the Solar Park Scheme of India, KPMG India, A report for India”, Power Technology, 28 August 2021, https://www.power- World Bank India office technology.com/marketdata/ramagiri-solar-wind-hybrid-project- 81 https://www.solairinc.com/subsidies-in-fisheries-sector-hybrid-solar- battery-energy-storage-system-india/ wind-energy-generator-2/ 8. Access to Land for Renewable Energy Investments  |  127 and is expected to mitigate 75,000 tonnes of carbon In India, there are 16 existing agrivoltaic projects. These emissions.82 projects are designed with low-height crops between solar panels. One substantial capital cost for agrivoltaics, Floating solar park: In countries where land is scarce, as opposed to standard solar projects, is the additional governments have commissioned solar power plants expense of support structures to raise and secure panels. that float on ponds, lakes, reservoirs, or any body of For larger farms, at least, the need to control costs may water. People’s Republic of China, the Netherlands, and drive the use of innovations, such as wide-span tension Portugal represent some of the leading countries in support structures. A 3.77 MW Agro Solar PV Power building floating solar parks. Where solar parks are to Plant is planned in Bangladesh on 12.5 acres (5 ha) of be constructed on water, consideration must be given land in the Pabna district in central Bangladesh. The land to those who have legal or customary rights over the for the project is classified as being for agricultural use water area, including for navigation, fishing, and water and a major portion of the area under the solar panels is extraction. They will need to be compensated for any planned to be used for farming. diminution in the value of their assets or livelihoods. Similarly, wind farms can be constructed in water, including offshore locations. These can also raise 8.3 Lessons on Land Assembly and issues over rights over these waters. The construction Management for RE of solar and wind farms over water can raise questions about their environmental impact, for instance on bird Land assembly for privately funded solar projects is migration routes. through two main options: direct negotiations with landowners or with the support of governments. In In India, the Omkareshwar Solar Park is being built on a Pakistan, the provincial governments of Sindh and water reservoir spread across 92 km2, of which 12 km2 Punjab have policies and processes in place for would be utilized for solar panels. The preliminary supporting leasing of public land for solar projects. feasibility analysis of the park has been completed in They have also begun digitizing public lands, which collaboration with the World Bank. The most important helps solar park developers. consideration for building a floating solar park is the cost. Solar panels require frames that can survive Developers generally prefer solar parks with corrosion and seasonal variations in water levels. contiguous tracts of land as there is the possibility of shared infrastructure and comparatively fewer issues Agrivoltaics: These systems promote the dual use of with land acquisition and development. The use of land for both PV solar and agriculture and are emerging fragmented plots of land creates additional costs in as a small-scale solution to energy and food challenges the form of the construction of external infrastructure, caused by climate change. For instance, hotter creation of access roads, and transportation costs. temperatures in South Asia damage standing crops – While the acquisition of government land is the most and solar panels, at the appropriate height, can provide preferable option for solar parks, there have been necessary shade for the plants while also generating instances of disputes with locals over land rights, electricity. The solar panels are typically elevated on illegal land encroachment, and disagreements about fixed support systems about 4 meters above the crop compensation. Rewa Solar Park, Bhadla III, and Bhadla field. Agrivoltaics help retain moisture in the soil and IV are such parks where more than 90 percent of the boost crop growth, and the water used for cleaning the land was acquired before auctioning. In Rewa Solar solar panels can be reused to irrigate the crops growing Park, developers paid locals double the land value as below the solar panel area. compensation for their barren land. 82 https://www.saurenergy.com/solar-energy-news/renew-power- From an economic and social perspective, receiving commissions-gujarats-1st-wind-solar-hybrid-plant annual land rentals is preferable to compensation in the 128  |  Access to Land in South Asia: The World Bank Guidance Note form of an upfront payment. Rental provides a regular land or parks that are restricted for development; and source of income to the landowners and gives them (f ) water bodies, such as rivers and lakes. By analyzing opportunity to access the land again after the expiry of all these criteria, this approach can determine feasible the lease. Leasing has recently gained traction in areas sites for RE projects. associated with high cost of land in the Indian States of There are multiple geospatial applications that allow Punjab, Karnataka, and Uttar Pradesh.83 analysts to identify optimal locations for development once data is acquired. The site suitability analysis can 8.4 A Decision-making Framework be performed using specialized platforms84 or more for the Future standard desktop software such as ArcGIS or QGIS. Depending on the skillset of the geospatial analyst, the This section builds upon the case studies and offers a geoprocessing can be conducted using plug-ins, such decision-making framework for advising client countries as the “Suitability Analysis” toolbox that allows the user on how best to access land for RE investments. In to add criteria and tailor it to their own specifications other words, it presents Task Team Leaders (TTLs) to calculate a suitability score. Alternatively, a model with a structure for how to understand this process could be scripted to identify and rank areas that meet and provides considerations and best practices for the specific needs of the user. For example, this method mitigating land issues at each stage in the project cycle. of geoprocessing could generate a map that highlights Through proper project design and implementation, land that is larger than a set hectare, has more than many common risks and delays can be addressed and a certain threshold of potential energy, is not more minimized. The framework is divided into three main than a certain distance from a substation, is above a stages: inception, preparation, and implementation. set levelized cost of generation (LCOE), and lies outside While it is best to apply this framework from the start, any protected area. Then the user can place weighted these considerations are useful at any stage. preferences among the land areas selected, such as proximity to dense population centers, road networks, Inception: Given the rising demands and limited land flat land, dry land, and so forth. availability in most countries in South Asia, it is best to monitor and proactively identify suitable land for RE. This approach, once tailored to the specific setting This site identification process can be performed at a and project, can be undertaken by governments and national level and will primarily rely on geospatial data. companies alike to identify areas that appear on paper Geospatial analysis provides an opportunity to create a as promising locations for RE investment. Performing map that highlights areas that are suitable for diverse this process systematically and proactively would sources of RE. routinely offer RE developers potential site locations. Furthermore, it would provide insight into which type Typically, the geospatial analysis considers several of RE project is best suited for specific areas and viable requirements, which can be weighted based on at certain costs – all of which are critical during project importance to identify appropriate locations for inception. RE investment. Depending on data availability, the analysis includes geographic data layers that depict (a) Preparation: In many parts of the world, land for RE natural resource potential, such as wind speed or solar projects may appear suitable for RE investments in radiation; (b) topography, terrain, or ground slope, from a GIS application, but the reality on the ground can a digital elevation model; (c) energy infrastructure, such be quite different. This discrepancy is often due to as grid lines and substations; (d) transportation lines inaccuracies or complexities in land administration and city centers; (e) land use, such as areas of protected 83 Source: Stocktaking of the Solar Park Scheme of India, KPMG India. A 84 There are numerous GIS Multi-Criteria Analysis tools available, some report for World Bank India office. include: ESMAP’s RE Zoning tool, pvDesign (for solar). 8. Access to Land for Renewable Energy Investments  |  129 130  |  Access to Land in South Asia: The World Village Bank boys Guidance leverage Note for pumping water to RE site laborers in Sonagazi, Bangladesh. Mika Törhönen body weights information. Common hurdles include (a) outdated engage with local communities. For example, it should land classification or land planning maps, where be able to answer questions such as: Do regulations official government maps fail to capture how land is allow for the formalization and/or titling of the land, being used in reality; (b) unclear cadastral data, so followed by the communities leasing of the land? If land that the boundaries of the plots have overlaps or do needs to be acquired, how high can the compensation not reflect the true boundaries of ownership; and be? Through a deeper understanding of the existing (c) ownership is contested, and various groups or legal framework, the task team can design an RE project individuals have claims to the land. Such issues often that is welcomed by the local community. have to be confronted when teams enter the field to further investigate the status of the land’s occupancy Implementation: The risks surrounding land need to and use. Renewables projects encounter the same be continuously monitored during implementation types of problems of poor quality land records and of an RE project. A grievance redress mechanism land administration in need of updating encountered (GRM) should be established to record all land- in other types of infrastructure projects. related complaints or conflicts. Long-lasting litigation surrounding land disputes is not uncommon and To minimize roadblocks at the project preparation the team should prepare to report disputes to stage, task teams should conduct field visits and management. Clear communication and messaging to consult with local stakeholders. Land records are often affected communities regarding how the RE project will managed locally, and the most up-to-date information impact the land and their use of it is also instrumental is decentralized. Therefore, visiting a local land in mitigating complaints. registration office and meeting with the land records division to understand the status of the land records will The distribution of any compensation promised during give teams a better understanding of how the project preparation should be closely monitored. For example, should go about accessing the land. For example, it any provision of basic services, subsidies, and royalties will allow the team to prioritize areas that are suitable offered to communities during consultations needs to for RE during land surveying (or resurveying) efforts or be subject to monitoring and occur in a timely manner. modernization and digitization efforts. If Task Teams remain vigilant regarding land issues and recognize the incredible importance of cultural Land for RE projects is often occupied by people with sensitivities, they will enhance their chances of success insecure land rights, who are not recorded officially in in securing access to land. central databases. It is critical that these communities are carefully involved and consulted during this process to avoid conflicts that could delay the project.85 8.5 Conclusions If properly prepared, RE projects can benefit local South Asian countries will need to access vast swathes communities. Not only can these communities profit of land to meet the climate actions to which they from a new reliable clean energy source, but also committed at COP26. This demand for land comes at receive monetary compensation for the use of the land. a moment when land is becoming scarcer due to rapid In addition to field work, teams should conduct a legal urbanization and the inundation or degradation of review to gain a strong understanding of local laws and land as a result of climate change. However, there are regulations surrounding land acquisition. This review several steps that governments in the region and World should aim to inform the project on how it can best Bank TTLs can take to accelerate the construction of 85 Lowery, S. and Vhugen, D. (2016). Land Tenure and Energy major RE projects: Infrastructure: Strengthening and Clarifying Land Rights In Energy Infrastructure Projects And Programming. LANDLINKS, USAID. Retrieved Conduct geospatial analysis paired with field from https://www.land-links.org/wp-content/uploads/2016/09/ USAID_Land_Tenure_Energy_Infrastructure_Issue_Brief-1.pdf validation before project implementation to 8. Access to Land for Renewable Energy Investments  |  131 Government housing site in river island in Jamalpur, Bangladesh. Mika Törhönen provide task teams with powerful decision-making Introduce a special land use category for agrovoltaics, information. Case studies suggest that RE solutions because they provide an option to blend energy that only need minimal land requirements are easier with food production. The global installed capacity of to implement. However, the total project area is not agrovoltaics has grown to an estimated 2.9 GW, led mostly the only factor. Location and proximity to existing by Germany, France, and Italy.86 Regulatory frameworks infrastructure and population centers play a large and support schemes are already in place in Japan, South role in determining the success of a project as well. Korea, People’s Republic of China, and France. For example, wind farms have smaller footprints than But for the agrovoltaics sector to move from the pilot solar parks but may be located at sites far from users. project stage to more widespread adoption, several Transmissions costs therefore need to be considered. policy and regulatory obstacles must be removed. Deciding which RE to use can be done through South Asian countries should use the policy and geospatial analysis, which can also identify suitable legislative responses developed by other nations to land for RE projects. Performing this analysis routinely help resolve legal, financial, and regulatory challenges. and systematically captures viable locations, which can be verified through site visits to confirm the land’s 86 Kaul, U. (2022). “Agrivoltaics Make Their Case For India”, Saur Energy International, 25 January 2022, https://www.saurenergy.com/solar- suitability. energy-articles/agrivoltaics-make-their-case-for-india 132  |  Access to Land in South Asia: The World Bank Guidance Note They should adjust regulatory frameworks for minimum Communicate clearly with populations impacted by panel heights and maximum shading ratios, as well RE projects. Accessing land for RE doesn’t have to take as post-project yield requirements. One challenge resources away from local communities. In fact, they is the classification of land used by agrovoltaics and can provide a wide range of benefits for project-affected whether it remains agricultural or non-agricultural populations. By raising awareness about the project land. Given that land administration rules are vastly and sharing information on its social, economic, and different depending on this classification, this hurdle environmental benefits, teams can build trust with local must be overcome before agrovoltaic projects are communities. They should also look for opportunities implemented at a large scale. to enhance community participation through direct and indirect involvement in the RE project. Projects Develop clear environmental and social criteria for that offer a stake to the community and employment rating potential sites when conducting assessments. opportunities have greater chance of gaining access to Formalizing data requirements early in the process the necessary land. allows for time to procure datasets, supplement missing data from alternative sources, or initiate data collection Be flexible about project design and take advantage specifically for the project. Based on the resulting of new technologies. The installation of RE is expected geospatial analysis, teams will be well-positioned to become increasingly mixed use and flexible. The to conduct geospatial analysis to determine land to portfolio of RE solutions optimizing land use are consider for RE projects, advise clients on centralized anticipated to expand beyond rooftop solar plants and versus decentralized RE solutions, and identify the solar canals, solar wind hybrid parks, floating solar type of RE project that may be most effective for a parks, and agrovoltaics. TTLs should make the most of specific setting. these new technologies to minimize land requirements. 8. Access to Land for Renewable Energy Investments  |  133 9  mproving Access to I Adequate Land for Affordable Housing Improving Access to Adequate Land 9.  for Affordable Housing 9.1 Introduction: Urban Land and parcel that they can use, subject to applicable zoning regulations. Moreover, housing is an aggregator of Housing Markets in SAR - Messy a dwelling and the underlying land and services, the and Bifurcated value of a “housing unit” being the combined value of the land and dwelling. The value of the underlying R apid urban growth has largely outstripped the capacities of cities to plan and manage urban land supply and infrastructure services for businesses and land is affected by the highest value feasible and permissible use, the permitted density of development, and the characteristics of its location, such access to households in most countries of SAR. Where policy and basic services and amenities and connectivity to urban regulatory regimes are in place, formal land supply often centers. Housing is essentially a private good that is is expensive and inaccessible to the majority of urban best provided by the market. The government’s role home builders – developers and households alike. should therefore be focused on establishing an enabling As a result, unmet land and housing demand resorts environment for the delivery of housing, addressing to informal land and housing supply, as evidenced by market failures, and correcting past government informal settlements mushrooming. policy failures. This chapter aims to answer the question of how to enhance the access to adequate land for affordable Land and housing market complexity and housing in SAR. The starting point is to understand, caveat from land user’s perspective (firms and families) both Housing affordability is a function of a household’s the formal and informal processes. This will in turn help capacity to pay87 for mortgage or rent. Housing identifying the pinch points and inform policy makers on affordability, which can be enhanced by reducing the how to provide an enabling environment and incentives cost of supply side or boosting purchasing power. This to promote diverse solutions for land and housing chapter focuses on the supply side and what can be supply to meet the varying and evolving demands done to facilitate affordable housing. commensurate with the local social-economic reality. Targeted support is also necessary to ensure adequate Low cost of land does not necessarily make housing access to land and housing for the poorest. affordable. Low cost land may be at disconnected locations, imposing high transportation costs, or lack What’s unique about access to land for trunk infrastructure, imposing high servicing costs. The affordable housing? cost may be low because land is vulnerable to disaster events such as flooding or landslides. It is necessary to For housing, access to land means more than just a look at the total cost of housing faced by households. piece of land. Access to land means access to floor area as well as the “air rights” or “development rights” 87 For ownership housing, capacity to pay is also determined by their that property owners have above or below the land access to finance. 9. Improving Access to Adequate Land for Affordable Housing  |  137 Peshawar Pakistan, Revenue Map. Mika Törhönen 138  |  Access to Land in South Asia: The World Bank Guidance Note 9.2 Framework for Expanding Land because links in the supply chain are often missing or misfunctioning, including the absence of clear titles Supply for Affordable Housing free of incumbencies, the lack of a current master or The Housing Value Chain shown in Figure 9.1, links the structure plan to guide future urban growth, overly different elements that must come together for the rigorous zoning and development control regulations, private sector to deliver housing for potential buyers delays in gaining development permits, and lack of or renters. Each link in the chain adds and/or affects infrastructure. the value of the final product. Spatial planning at There are different avenues for enhancing the supply metro level gives predictability for the private sector of land for housing: greenfield development through to plan their developments. The process by which land conversion, upgrading of informal settlements, land is acquired from private landowners will be and densification, rehabilitation, and conversion of most efficient if the underlying ownership rights are brownfield districts. registered, and the land is free from incumbencies. Zoning and development control regulations affect the physical outcomes by determining floor areas, density, 9.3 Cross-cutting Measures: heights, etc. The connectivity and availability of basic Planning, Regulating, and Financing infrastructure and social services, much of which is This section aims to lay out the enabling environment provided by the public sector, has significant impact for supply of adequate urban land to all residents, on the value of the land. The cost of developer finance including the poor. First, it emphasizes the importance and construction inputs affects the resulting price of of spatial planning for expanding the supply of the property. Access to finance for mortgages or self- adequate land for housing at structural macro and construction plays an important role in making housing implementing local levels. Within this context, affordable. integrated land use and transportation planning This housing value chain is an ide­ alized version of helps not only ensuring the connectivity of land but the housing production process. In many countries also promoting more equitable and affordable land in SAR, a formal housing value chain produces a markets. Second, flexible zoning and development small share of the overall housing stock. Most people control regulations expand the supply of floor area and firms turn into the informal housing value chain, for housing. Figure 9.1: The Housing Value Chain $ City planning and Infrastructure Developer Public asset building regulations and services finance management Housing $ Access to land Construction and End user Property building materials sectors finance management Source: http://documents1.worldbank.org/curated/en/922921600345178886/pdf/Urban-Land-and-Housing-Market-Assessment-A-Toolkit.pdf 9. Improving Access to Adequate Land for Affordable Housing  |  139 Figure 9.2: The DP-TP mechanism integrates large-scale expansion planning with local-scale implementation The Development Plan (DP) is a single citywide structural Many sub-ordinated Town Planning Schemes (TPS) support plan, defining growth areas deep into the periphery and local implementation, reconciling larger systems (e.g., arterial arterial infrastructure for effective connectivity. The above DP infrastructure needs) defined in the DP) with local requirements representation shows the inclusionary zoning and regulation (e.g., spatial planning of services, reservations, consolidation; overlay zone for affordable housing along the ring road. also sharing of costs and benefits through fair compensations and & redistribution). Source: based on Nohn/Rapid Urbanism. Image source: AUDA Proactive planning for predictability and implementation. For example, Gujarat, India uses sustainability Development Plans with subordinated Town Planning Schemes (DP-TP mechanism) across the two planning Land and property markets alone do not produce scales. (Figure 9.2) efficient land uses for firms and households in cities. The government has an essential role in coordination, Regarding the structural plan, one cost-effective particularly in fast growing cities, as firms are clustering way is through demarcating and ‘protecting’ land for arterial grid of roads and other core infrastructure on and families are settling in, to ensure infrastructure the urban periphery before settlement occurs.88 This is provided for connectivity and services are made is the simplest proactive planning option, aiming for available for residents and businesses. Spatial planning getting one step ahead of unplanned urbanization and is a critical instrument that city authorities have in hand for enabling the future provision of an efficient public for firms and families to know what to expect for future transport system. This was the approach adopted by development. New York City in their 1811 Commissioners Plan. This While there are different terminologies and systems in Plan anticipated a seven-fold expansion of the city’s spatial planning, there are two fundamental planning footprint, and mapped and demarcated a grid system scales: (i) a larger-scale structural plan defines areas of roads on then-agricultural land in Manhattan. The for expansion and arterial infrastructures, thereby grid system created still carries New York’s traffic ensuring development at adequate locations and today, with water and sewerage infrastructure built connectivity between urban areas; and (ii) a number 88 Angel, S. (2011). Making Room for a Planet of Cities. Cambridge; MA: of smaller-scale local area plans that facilitate local Lincoln Institute 140  |  Access to Land in South Asia: The World Bank Guidance Note Figure 9.3: Preliminary Sketch Plans for Arterial Grids in Intermediate Cities in Ecuador, 2006 Preliminary Sketch Plans for Arterial Grids in Four Intermediate Cities in Ecuador, 2006 Source: Prepared by municipal officials from the Planning, Cadastre, Legal, and Finance Departments of Eloy Alfaro, Durán and Riobamba. In: Angel, 2008. underneath. Figure 9.3 shows how the Intermediate private services. Investing in mass public transit to Cities in Ecuador laid out arterial grid to signal reduce transportation costs does not only reduce where public infrastructure will be and, accordingly, the location premium of central locations but also where firms and families can anchor their long-term reduces households’ transportation cost and enhances investments. Identifying, acquiring, and securing the their access to income opportunities. High prices for right of ways early can avoid costly infrastructure central locations reflect the scarcity of well-connected and accessible lands. According to Alonso (1964), retrofitting later. households unable to finance the premium for well- located land can opt for buy cheaper land and travel Strengthening connectivity and mobility longer distances instead89. Households must balance for firms and families their financial and time budgets as longer commutes reduce time for employment and family activities. Land use and transportation planning need to be Longer commutes tend to correlate with negative coordinated to ensure that land for urban development is accessible and connected, and that people are not 89 https://housingfinanceafrica.org/documents/whats-affordable- developing-a-framework-and-calculator-for-determining-housing- cut off from access to employment and public and affordability 9. Improving Access to Adequate Land for Affordable Housing  |  141 Figure 9.4: Case of Jakarta’s Transjakarta mass transit service to affordable housing projects The red arrows point to some of the feeders (in light grey), and the red box in the map’s key points to the multiple dedicated feeder lines that connect large housing projects. Source: Nohn/Rapid Urbanism. externalities, for example causing more traffic pollution connectivity and flattened the land price gradient, thus and congestion. In addition, lower densities consume helping to maintain more affordable land prices and more land and tend to increase the cost of servicing relative intra-urban equality. with infrastructure as the economies of scale from Promoting mixed-use mixed-income settlements can density are lost. A modern case is Jakarta (Figure 9.4) reduce the need for motorized transit by providing that links public housing schemes with the city through for local commerce, social amenities, recreation, and strategic investments into the metro and BRT system. employment. A degree of self-sufficiency reduces Promoting dense transportation networks and sub- the need for longer commutes for employment and centers for shorter commutes around interchanges public and private services. The same can apply to contributes to equalizing land markets. For example, developments mixing socioeconomic groups with by evidence from rapid urbanization in Berlin, Germany reducing the relative monopoly and location premium shows how public mass transit has improved intra-urban of urban centers and sub-centers and, thus, for 142  |  Access to Land in South Asia: The World Bank Guidance Note Figure 9.5: Equitable and affordable land markets during rapid urbanization due to a dense mass public transit network Source: Nohn/Rapid Urbanism, based on Source: Ahlfeldt & Wendland, 2011 Ahmedabad, Gujarat India: Enabling Markets to Supply Affordable Housing through Inclusionary Zoning To enable the market to supply affordable housing, Ahmedabad Urban Development Authority (AUDA) created the Residential Affordable Housing Zone (RAH) overlay in the statutory DP 2021. The Inclusionary Zoning and Regulation (IZR), conceptualized in 2012 under then-Chief Minister Shri Narendra Modi, has been envisaged to allow the construction of up to 1.5 million dwelling units by 2035. RAH is delineated as a one km wide overlay zone along the outer edge of Sardar Patel Ring Road (SPRR), measuring around 71 sq km and assembled using Town Planning Schemes. AUDA defines affordable housing by size (up to 90 sq meter), not by price. Private developers are incentivized to construct affordable housing in the RAH zone: (i), developers enjoy access to well-developed land with good public transport network connectivity; (ii) direct incentives include a density bonus of up to 10 percent commercial floor area, and a relaxation of parking standards; (iii) indirect incentives include a GST reduction from 5 to 1 percent, and access to prime lending (as AH has an infrastructure status). Developers are free to either build affordable housing and take advantage of the incentives offered or stick to the base zoning. Since 2012, over 31,000 units have been developed in RAH, with 20 percent being small (e.g., One Room Kitchen, One Bedroom Hall Kitchen, and 1.5 Bedroom Hall Kitchen). In proximity to the eastern industrial areas, dwelling units as small as 18 square meters were developed, usually not supplied by the formal developers. Literature points out the fact that IZR has been successful in catering to Low Income Groups and Middle Income Groups (located below conventional market supply and above public programs). 9. Improving Access to Adequate Land for Affordable Housing  |  143 equalizing land prices. This is a key principle of the Improving land use efficiency emerging ‘5-minute neighborhoods’ and ’15-minute cities’ concepts.90 Governments can remove obstacles to higher land use efficiency while respecting social, environmental, Making less stringent regulations for economic, and institutional considerations by policies such as: increasing floor area supply The need for density „„ Increasing the buildable floor area ratio (FAR) to achieve higher density at suitable locations, in To realize social and environmental objectives under exchange for exactions. This may decrease the rapid urbanization pressure, it is critical to both densify market price of the floor area. As it may also be existing areas and expand into new growth areas. expected to increase the value of the underlying Angel et al (2021) found that in a global sample of land, the additional floor area should not be 200 cities, 23 percent of urban population growth free but sold at a price that makes densification was accommodated by densifying existing urban more economical.92 areas while 77 percent took place in expansion areas. Moreover, urban densities declined between 1990 and „„ Reducing setbacks from roads and plot 2014, while few cities were able to densify and develop boundaries, and in-between buildings, as more compact forms successfully (e.g., Singapore, appropriate. Terraced row housing without Bogota, Shenzhen).91 Dense urbanization is highly side margins in-between use land more desirable as reduces the need for new land supply efficiently. and land consumption with benefits, such as the „„ Reducing minimum road width, especially for protection of agriculture and habitats. Higher densities inner Right of Ways in walkable neighborhoods can result in agglomeration economies, such as using and near transit. Within local neighborhoods infrastructures more efficiently and shortening trips. and districts, walking and cycling may be Figure 9.6: Typical minimum road dimensions in affordable land Figure 9.7: 2m footpaths provide density, developments livability, accessibility, and affordability in the Petogogan Project, Jakarta, Indonesia Source: Centre for Minimum Cost Housing. McGill University 94 Source: Matt Nohn/World Bank 92 E.g., Ahmedabad Urban Development Authority, Gujarat, India sells 90 E.g., see https://www.barcelona.cat/metropolis/en/contents/living- additional chargeable FSI at 10 to 40 percent of jantri rates (government proximity-the-15-minute-city, or https://www.washingtonpost.com/ rates), with lower charges for (more affordable) smaller residential units lifestyle/2023/03/03/15-minute-cities-faq/ in affordable housing zones. (General Development Control Regulations 91 Angel, S.; Lamson-Hall, P.; Blei, A.; Shingade, S.; Kumar, S. Densify and 2021, Schedule 19) Expand: A Global Analysis of Recent Urban Growth. Sustainability 2021, 93 Centre for Minimum Cost Housing. (1990) How the Other Half Builds. 13, 3835. https://doi.org/10.3390/su13073835 Volume 1: Space. Montreal: McGill University, with support of CIDA. 144  |  Access to Land in South Asia: The World Bank Guidance Note considered the preferred mode of transport. provision) nor unduly impact on the elderly and Affordable housing projects may strategically those with disabilities in general. use narrower roads, with access roads of only Reducing minimum lot dimensions to save on land: 3m to 6m, and local roads of 7.5m to 12m e.g., Tamil Nadu reduced the minimum lot size for (Figure 9.6). Some projects introduce even Economically Weaker Section housing from 40m2 to narrower pedestrian-focused right of ways: 32m in Chennai.11 Similarly, row plots be deep and e.g., the Petogogan Project under Jakarta’s narrow to economize on servicing costs.12 Kampung Deret Program used footpaths of 2m to allow in-situ redevelopment of an unplanned settlement.94 (Figure 9.7) Adequate circulation Promoting equity and inclusivity widths start at 1.50m and increase with Affordability implications of extra floor space are functions/network level. (USAID (1984), Site complex. Increasing floor area ratios should reduce and Unit Design Handbook, p.94.) the market price and increase housing affordability. „„ Reducing parking requirements, especially for However, if higher density implies higher construction affordable housing and near public transits. costs, then this may not be a solution. This complex Portland, Oregon no longer requires parking relationship requires strategizing for different market for affordable housing developments and segments in parallel and spatial integration of these has reduced parking requirements for regular different segments within mixed income settlements developments near transits.10 to promote urban equity. Otherwise, urbanization risks „„ Relaxing elevator requirements in medium- pricing out the majority over larger areas with adverse rise developments. Care should be taken to outcomes, such as unplanned urbanization and/or neither reduce accessibility over the long monotonous peripheral sprawl (cf. the Ozymandias term (e.g., through designs allowing future Syndrome13). Figure 9.8: Differentiation and integration mobilizes land for inclusive urbanization, globally DFID-supported model by Davidson and World Bank-supported Bertaud Bertaud, USAID-supported MIT model by Caminos Payne, here applied to Ismailiyah, Egypt here used for planning a project in India and Goethert, inter alia used in El Salvador Nota bene: all model plans are colored on a heat map, with red for high value lots on main roads with good services and blue for affordable lots and basic services. Source: Nohn/Rapid Urbanism based on original materials96 95 Rapid Urbanism Lecture on planning human settlements. Online at: www.rapidurbanism.com/resources. Reference to original materials: For Bertaud Model: Annex 1. In: Bertaud, Alain, M. A. Bertaud, and J. O. Wright. “Efficiency in Land Use and Infrastructure Design: An Application of the Bertaud Model.” Washington, DC: The World Bank, 1988. For MIT Model: Caminos, Horacio, and Reinhard Goethert. Urbanization 94 Despite their narrow dimensions, urban footpaths double as a social Primer. MIT Press, 1978. space, thanks to adjacent front porches, and accommodate not only For DFID Model: Davidson, Forbes, and Geoffrey Payne. Urban Projects 2-wheeler parking but also some planting and storm water management. Manual. Liverpool University Press, 2000. 9. Improving Access to Adequate Land for Affordable Housing  |  145 Integration/inclusion and grading/differentiation groups) and are integrated in spatial proximity, while are two sides of the same coin. Differentiating the sufficient separation aids signaling social status standards for roads (e.g., street width), land (e.g., and maintaining property values for effective cross- plot sizes), and services (e.g., individual vs shared subsidization. or community-based) with the street network Local diversification is a precondition for more hierarchy reinforces natural location-based value equitable cities and requires inclusive frameworks differences for more diverse settlements. Such a that promote locally diverse land markets. Graded ‘diversity approach’ in spatial planning does not infrastructure provision, differentiated land use promote higher standards throughout: the resulting zoning, and varied development control regulations costs and values would be counter-productive, are strategic tools for supporting diversity, resulting pricing out the poor, exhausting scarce fiscal in differential land values, and facilitating inclusive resources, risk gentrification and/or subsidy capture. access. Notably, this approach is enshrined in key Instead, the focus should be on demand-responsive textbooks/strategies by various development actors, diversification: different products (services, parcels, globally. (Figure 9.8) and buildings) cater to different users (e.g., income Town Planning Schemes in Gujarat The Gujarat Town Planning and Urban Development Act allows acquiring up to 50 percent of land for public purposes in Town Planning Schemes: an integrated land management, urban planning and fiscal tool combining (a) land pooling and readjustment, (b) exactions in land for public purposes, (c) servicing, and (d) betterment charges. (Figure 9.9) Deductions in land for public purposes include roads (15%), parks (5%), social amenities (5%), affordable housing (10%), and a land bank (15%). In practice, 40 percent are typically deducted, while raising the share to 50 percent is being discussed in view of large windfalls arising from public action. Finally, the 10 percent of land captured for affordable housing tends to be used for reservations of existing unplanned settlements, taking them out of the general land market and enlisting them for future upgrading. If unplanned areas account for less than 10 percent of the land, additional reservations may be made to secure land for other housing schemes. Figure 9.9: Key steps in Gujarat’s Town Planning Schemes Image source: Nohn/Rapid Urbanism, based on Ballaney & Patel, Indian Infrastructure Report 2009 Further references: Gujarat Real Estate Regulatory Authority (2022). Manual for Preparation of Town Planning Schemes. 146  |  Access to Land in South Asia: The World Bank Guidance Note 9.4 Leveraging Fiscal Policies for Land Pooling and Land Readjustment for Equitable and Efficient Access to supply of consolidated parcels and local services Adequate Land for Housing Town Planning Schemes in Gujarat combine the Governments need to mobilize fiscal resources for provision of consolidated and serviced land for the servicing land or mobilizing land for the poor in efficient general market with an exaction of 10 percent of the and equitable ways. In addition to land value capture total land for affordable housing. (discussed in Chapter 6), strengthening land value taxation may provide a means for guiding improved Sites and services urbanization, while reducing the market price of land – thus easing access to land for housing – while ‘Site and Services’ is an approach to urbanization and generating fiscal revenue in the most efficient ways, housing that focuses on the provision of formal serviced thanks to inelastic land supply. lots to provide alternatives to informal urbanization. Sites and Services aim to empower households to build 9.5 Realizing Adequate Land Supply housing incrementally in an enabling environment that although basic, is safe and livable. It is thus a for Affordable Housing significant improvement over informal settlements. While a large-scale spatial frame is critical to guide land Typical components of sites and services include: the development, particularly for urban expansion, multiple formal lot (with tenure security), basic infrastructure challenges exist when such expansion is to be realized (e.g., water, sanitation, electricity) and social amenities at the local level, as the process often entails outright (e.g., education and health), technical assistance and land acquisition, and even the use of eminent domain. access to finance (to support self development). “Site Moreover, the standard under which newly converted and Services” is considered a success for preventing land will be serviced with infrastructure network, and informal urbanization with a minimalist approach that, sequencing of it, has major impacts on its affordability. thanks to reduced resource requirements, is scalable. The session below focuses on two instruments, Land However, early implementation challenges also show Pooling and Land Readjustment (LPLR) and Sites and the risks, such as the use of cheap peripheral locations, Services, to illustrate how such expansion can be lack of service provision, and an overemphasis of cost carried out in a more sustainable and inclusive manner. recovery from low-income households. The Case of Khuda Ki Basti, Pakistan The case of Khuda Ki Basti (KKB), Pakistan, stands out for its pragmatic approach, learning from and mimicking the informal urbanization process in Katchi Abadis, while preventing irregular and costly layouts and undersupply of public spaces. The local NGO Saiban, which operates the scheme, argues that the approach is easily replicable, ensures long term sustainability (as community is involved at all stages of planning and development), makes secure tenure accessible to the urban poor, is largely self-financing by linking the provision of services to cost recovery, while deferring payments for the land. The NGO argues that the sequence of the delivery chain is critical for success. (Figure 9.10)97 96 Rapid Urbanism Case Study on KKB: https://app.box.com/s/989bj1gjy5 tamjuzj0ooukwe3f7mu7mm 9. Improving Access to Adequate Land for Affordable Housing  |  147 The Case of Khuda Ki Basti, Pakistan (Contd...) Figure 9.10: The importance of the sequence: KKB reduces starter cost in the most drastic way Complexity and starter costs build up from (i) Khuda Ki Basti at the bottom (simplest and most economical) over (ii) traditional/informal development and (iii) sites and services, to (iv) modern/formal/developer-driven development. Source: Nohn/Rapid Urbanism, adapting third-party material related to KKB, however of unknown origin. Firstly, Saiban sets up a local office on site. All rules of the scheme, including the financial details, are painted on the wall of the NGO. The NGO also runs a reception center that hosts prospective beneficiaries for one week. All households who want to move on site are required to live in the reception center for one week under most basic circumstances to reduce the capture of subsidies by better off households, who are less likely to accept this procedure. Households first construct a temporary shelter on their (unimproved) lot before self-building a basic home with technical assistance. The provision of basic services is phased to minimize starter costs. Soak pits for individual sanitation is the first infrastructure to arrive. All households living in a network area need to contribute financially before networked services arrive. Typically, electricity is first, then water, and finally road paving. As long as households lack piped water, they are serviced with private water tankers, to bridge the time gap.16 Upgrading: regularization and servicing possible eviction and encourage further investment by households in improving their homes incrementally Upgrading informal settlements is another important over time. The stumbling block for upgrading is, avenue to realize access to land, particularly for often, the “incompatibility” with formal planning and the poor. Formalizing land rights for slum dwellers service standards. The case of slum upgrading in can put land into formal market circulation and Mukuru, Nairobi, Kenya shows how to overcome this infrastructure upgrading, even without titling, is challenge by designating the settlement as a Special also proven to be sufficient to offset concerns about Planning Area. 97 Siddiqui, T., 2011, “Affordable Housing: Is it possible?” 148  |  Access to Land in South Asia: The World Bank Guidance Note Figure 9.11: The Case of Khuda Ki Basti, Pakistan: incremental development yields adequate habitats over time Source: Nohn/Rapid Urbanism. Over time, a consolidated habitat develops, which is found to be superior to informal settlements due to (a) a rational urban layout, (b) technical assistance to ensure the quality of construction, including local material production, (c) patient financing and cost recovery, and (d) a supportive environment in which both formal and informal social amenities (e.g., education and health) arrive. Another critical component is subsidized transport linking the peripheral (low cost) site to ensure connectivity. Subsidized informal transport is available during the early stages of the settlement, with eventually formal bus services are provided. Owing to modest subsidies and the prevention of costs and risks associated with informal development, the costs to households are about $1,260 in KKB versus $1,630 (+30%) in an alternative informal settlement (GZX) over the first 10 years.17 Due to the innovative approach, KKB has been awarded the Aga Khan Price for Islamic Architecture. Mukuru, Nairobi, Kenya: participatory in-situ slum upgrading with negotiated planning standards Mukuru belongs to Nairobi’s’ largest clusters of informal settlements. Located in Makadara industrial zone near the Central Business District, it has an area of 278 hectares and 400,000 people. Its land is controlled by multiple private individuals with leasehold rights. Its residents tend to be extremely poor and informally employed in the vicinity, and 94 percent are tenants. Inadequate services and precarious tenure security expose them to typical urban poverty-associated risks, costs, and stigma. Thanks to sustained advocacy by the Muungano Alliance (comprised of Muungano wa Wanavijiji (MWW), a federation of the urban poor, and Akiba Mashinani Trust (AMT) a support NGO, both affiliated with Slum Dwellers International, SDI), Nairobi County Council (NCC) declared Mukuru as a Special Planning Area (SPA) in 2017, mandating a development 98 Asad Azfar & Rahman, A. (2004). Housing the Urban Poor. Acumen Fund 9. Improving Access to Adequate Land for Affordable Housing  |  149 Mukuru, Nairobi, Kenya: participatory in-situ slum upgrading with negotiated planning standards (Contd...) moratorium of two years and the preparation of a participatory physical development plan. SPA status allowed the community to leverage state resources for upgrading the settlement. NCC and AMT collaborated, forming interdisciplinary planning consortia for eight priority sectors (Figure 9.12). The consortia convened expertise from 42 local and international civil society and private sector organizations, with the community being at the center of the process. Figure 9.12: Mukuru Upgrading Planning Consortiums working on eight priority sectors 1. Housing, Infrastructure & Commerce 2. Education, Youth Affairs & Culture 3. Health Services Mukuru SPA 4. Land & Institutional Frameworks Planning Consortiums 5. Water, Sanitation & Energy $ 6. Finance 7. Environment and Natural resources 8. Coordination, Community Organization & Communication Source: www.muungano.net/browseblogs/2021/4/7/mukuru-spa-update-from-planning-to-implementation-in-2020 The Housing, Infrastructure and Commerce Consortium explored scenarios of various planning standards. Acknowledging the challenges of brownfield redevelopment and upgrading underdeveloped settlements, the residents opted for locally appropriate planning standards that accommodated more residents without sacrificing security, health, or resilience. Had Mukuru adopted conventional standards, the entire settlement would have been required to resettle. By contrast, the negotiated standards allowed 87 percent of residents to stay. For example, the community prioritized a transport network with the widest road measuring only 12 meters instead of the conventional width of 48 meters. Acknowledging that most residents are pedestrians, the design focused on non-motorized transport and narrower roads and paths. The SPA also explored alternative service delivery models and technologies, such as “water ATMs” to supply clean potable water thereby avoiding the cost of individual connections. Finally, the intervention enhanced tenure security for approximately 100,000 households, who now enjoy use rights over their dwellings, but which cannot be transacted in the formal market or mortgaged. Equally if not more importantly, Mukuru’s Integrated Development Plan is coordinated with Nairobi’s larger Integrated Development Plan, thereby receiving an official endorsement for the alternative planning standards. Local politicians, including the Governor of Nairobi City County, have publicly endorsed the SPA’s plan and the importance of community-led planning processes. Building on this success, the adjoining Kibera, Nairobi’s largest slum, was declared an SPA, and nearby Mathare is under consideration. 150  |  Access to Land in South Asia: The World Bank Guidance Note Brownfield: infill/densification 2. Horizontal extension: adding new floor space adjacent to existing buildings. Brownfield infill and densification may be realized 3. Perimeter development: developing closed block through various approaches, each of which may be perimeters. suitable in different circumstances. For example, the 4. Courtyard development: block interiors provide Hamburg’s ‘More City within The City’ theme uses space for off-grid clusters.101 urban densification strategically to accommodate 90 percent of residential development, not only 5. Conversion: unused buildings (e.g., military or using existing urban infrastructures efficiently but industrial yards) are repurposed. also enhancing the connectivity and accessibility of 6. Restructuring: e.g., using parking and development.99 Classifying densification options may manufacturing to accommodate new urban be useful for effective policy design. In this respect, uses. Germany promotes six differentiated approaches to The Johannesburg case study is one of a housing densification:100 program mobilizing supply through many small-scale 1. Vertical extension: adding additional floors on projects, a much-neglected area. top of existing buildings. Johannesburg, South Africa’s Inner-City Housing Upgrading Trust: inner city rehabilitation and adaptive reuse for affordable rental housing The end of the Apartheid era caused Johannesburg’s economy to decline. Established businesses and wealthy families abandoned the inner city in the early 1990s. Local slum lords rented out vacant buildings suffering from overcrowding, poor maintenance and lack of basic services, violence and stigma to newly arrived migrants, and a red line impeded commercial banks mortgages. Acknowledging the demand for rental housing, entrepreneurial developers moved in to invest in these dilapidated properties. The Inner-City Housing Upgrading Trust (ICHUT) was established in 1992 by Central Johannesburg Partnership (CJP) to tackle the city core’s decline. ICHUT provided tenant cooperatives with subsidized loans to acquire and operate the properties, as well as related technical assistance, such as entrepreneurial capacity development and network building. By 2003, ICHUT transformed into National Urban Housing Finance Trust (NUHFT, later renamed to Trust for Urban Housing Finance (TUHF)) with a mandate to combine social housing and standard residential finance in a sustainable operating model. Given the commercial banks’ reluctance to provide credit, TUHF relies on the South African National Housing Finance Corporation for refinancing, while employing a “character-based approach” in lending to clients.103 TUHF has been operating for almost 20 years and has branched out to Durban, Port Elizabeth, Cape Town, and Bloemfontein, with operations in 94 cities. By 2019, TUHF had financed 285 entrepreneurs, 598 buildings, and 38,770 rental units. Its loan book had grown at a rate of 12 percent per annum to ZAR2,7 billion (USD 204 million) and its 2018 operating profit was ZAR148 million (USD 11.2 million).104 TUHF adopts a blended finance approach by combining concessional, commercial and grant funding from an array of public and private institutions. TUHF has transformed from a not-for-profit entity to a private and, subsequently, a public entity in response to the evolving profile of its funders and growing funding needs. TUHF champions a “massive small” approach, achieving scale through the underwriting loans to many small scale landlords. This approach promotes densities and urban infill, as well as entrepreneurial development. 101 “Off-grid” clusters reduce public servicing cost: they locate inside urban block and are serviced by private infrastructure, only. 102 TUHF employs a “character-based lending approach”, as 99 City of Hamburg, Urban Development Department. http://www. understanding the applicants’ character is key to predicting the hamburg.de/bsw/4640464/2015-11-19-vnw-mv likelihood of entrepreneurial success and loan repayment. 100 German BBSR. In: Der Spiegel: http://www.spiegel.de/wirtschaft/ 103 CAHF (2019). Raising Capital to Regenerate Inner Cities: service/stadtplanung-wie-mehr-menschen-in-die-staedte-passen- The Case of TUHF Holdings (Pty) Limited. Accessible online: sollen-a-1083766.html https://housingfinanceafrica.org/app/uploads/15-case-study.pdf 9. Improving Access to Adequate Land for Affordable Housing  |  151 Johannesburg, South Africa’s Inner-City Housing Upgrading Trust: inner city rehabilitation and adaptive reuse for affordable rental housing (Contd...) The case of TUHF provides valuable transferable lessons for rejuvenation and densification of existing, declining,/or under- developed areas, such as inner-cities, old cities, gamtals/urban villages, or informal settlements. For example, villages being absorbed by growing urban agglomerations are often carved out of development plans and tend to be relatively underdeveloped compared with urbanized surroundings. Similarly, provision of basic services in unplanned settlements creates opportunities for bottom-up densification, thereby increasing returns on housing investments and improving tenure security. Providing access to finance and technical support may promote effectively locally-driven renewal and densification. The case stands out for creating affordable rental spaces, an often-overlooked option. 9.6 Conclusion City authorities need to finance much of the local infrastructure and basic services to ensure adequacy Enhancing access to land for affordable housing of land supply. Land-based financing, including land requires a sound understanding of the long and multi- value taxation, can contribute to mobilizing the fiscal sector delivery chains involved and the segmentation revenues needed to finance green and just urbanization. of markets. Spatial planning at strategic local levels is critical to set the rules for future supply of urban At the implementation level, access to land for land uses, infrastructure services, and to coordinate affordable housing can be realized through expansion, locational choices for firms’ investment and household densification, and upgrading and regularization. A settlement. In particular, integrated strategies for variety of specific instruments and innovations around transportation and land use planning contribute the globe have successfully enhanced access to synergistically to controlling central land costs and adequate land for affordable housing. Scaling up upon peripheral transportation costs, thereby serving as a these successes requires an enabling environment surrogate for the supply of well-connected land. Zoning through multiple cross-cutting measures (planning, and development control regulations, while aimed at regulation, and financing) to make land and housing addressing externalities, should be market-responsive choices available for every rung of the income ladder, and conducive to land use efficiency and inclusivity. with basic services available to all residents. 152  |  Access to Land in South Asia: The World Bank Guidance Note 10 Conclusions 10. Conclusions S outh Asia’s historical leadership in land recording is undeniable, but recent decades have seen the region fall behind global best practices. The poor state subject matter specialist involvement in investment scoping and design, but it is meant to highlight aspects that need to be considered in infrastructure investments of land records and public land inventories, the level of in the region. informality in land holding and transfers, widespread land disputes, weak land valuation infrastructures, The guidance is intended to help those who are not out of date spatial planning policies and development land specialists proactively address land challenges controls, and limited use of instruments to capture and opportunities. More fundamentally, the authors value have negatively impacted infrastructure want to send a strong message to the region on the development across the region. These factors have held dangers of letting land challenges further escalate. The back investments and private capital from affordable current state of affairs is unacceptable. If countries do housing projects, resulted in the delay or cancelation not succeed in improving their land records and land of RE investments, and derailed investments in transit management systems and services, it will have severe corridors. negative impacts on infrastructure development, food production, environmental conservation, economic The responses to these challenges have been growth, and social and political stability. pragmatic and innovative. Countries, states, provinces, and cities have developed ad hoc approaches to clean On the other hand, investment in land administration up land records, mapping, and informality. While and management infrastructure and services has some investments have eventually made progress, the potential to reap enormous economic, social, in other cases projects have been cancelled before and environmental benefits. The costs of inaction they ever began or have faced systemic delays due to are much higher than those of action. Investment in land issues with consequentially diluted benefits. As land will make economies function more efficiently, disillusionment has crept in, it has become acceptable allow countries to meet their nationally determined to pursue compromised outcomes due to the contributions on climate actions, and empower men, land challenge. women, and families to leverage their main asset for personal development and growth. The current situation is not inevitable. Governments in the region, as well as professionals working on land South Asia can once again reclaim its status as a global access issues, should focus their efforts on finding the leader in land administration and management. But best way out of the challenging situation – particularly investments in land cannot be delayed. It is the region’s in light of rising population growth, continuously time to achieve digital and integrated land records accelerating urbanization, and the increasing demand with high reliability and low dispute rates. In doing for land for climate change actions. This guidance note so, it will gain the ability to leverage asset values for provides practical advice on how to assemble, acquire, investments and revenue, plan and implement resilient and leverage lands for area-based investments. It does cities for growth, and preserve the environment for not aim to be comprehensive or obviate the need for future generations. 10. Conclusions  |  155