Publication:
Land Leasing and Land Sale as an Infrastructure-Financing Option

dc.contributor.author Peterson, George E.
dc.date.accessioned 2012-06-26T14:38:37Z
dc.date.available 2012-06-26T14:38:37Z
dc.date.issued 2006-11
dc.description.abstract Municipal land sales provide one option for financing urban infrastructure investment. In countries where land is owned by the public sector, land is by far the most valuable asset on the municipal balance sheet. Selling land or long-term leasing rights to land use while investing the proceeds in infrastructure facilities can be viewed as a type of portfolio asset adjustment. This paper shows that in China many municipalities have financed more than half of their high rates of infrastructure investment from land sales, for periods of 10 to 15 years. Much of the remaining investment has been financed by municipal borrowing against the collateral of land values. Other countries also have turned to land sales and leasing for infrastructure finance. From a local perspective, land sales have the advantage that they typically are free from the intergovernmental restrictions that require higher-level approval for increases in local tax rates or user fees and that restrict local government borrowing. However, financing municipal infrastructure investment through land sales creates special risks that are not recognized in most intergovernmental fiscal frameworks. One danger involves the use of proceeds to finance operating budgets. Risk exposure is exaggerated by the highly volatile nature of urban land markets and evidence that in some countries urban land values in 2006 reflected a real estate bubble. In the past, Hong Kong, a jurisdiction that has relied heavily on land-leasing to finance its infrastructure budget, has seen land sales fall to zero at the bottom of the real estate cycle. The greatest financial sector risk stems from municipal borrowing based on inflated land values offered as collateral to banks. Sound intergovernmental fiscal management will require tighter regulation of municipalities' financial leveraging of land assets to avoid excessive risk taking by local governments. en
dc.identifier http://documents.worldbank.org/curated/en/2006/11/7154705/land-leasing-land-sale-infrastructure-financing-option
dc.identifier.uri http://hdl.handle.net/10986/9020
dc.language English
dc.language.iso en_US
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper; No. 4043
dc.rights CC BY 3.0 IGO
dc.rights.holder World Bank
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject ACCESS TO LAND
dc.subject ASSET SALES
dc.subject ASSETS
dc.subject AUCTIONS
dc.subject BETTERMENT TAXES
dc.subject BONDS
dc.subject CAPITAL BUDGETS
dc.subject CAPITAL COSTS
dc.subject CAPITAL PROJECTS
dc.subject CITIES
dc.subject COLLATERAL
dc.subject DEBT
dc.subject DEBT SERVICE
dc.subject DEVELOPMENT AUTHORITIES
dc.subject DEVELOPMENT BANKS
dc.subject ECONOMIC GROWTH
dc.subject ECONOMIC PERFORMANCE
dc.subject FISCAL CAPACITY
dc.subject FISCAL DECENTRALIZATION
dc.subject FISCAL DEFICITS
dc.subject FISCAL MANAGEMENT
dc.subject FISCAL REFORMS
dc.subject FISCAL RESPONSIBILITY
dc.subject HOUSING
dc.subject INCOME
dc.subject INFRASTRUCTURE LOANS
dc.subject INSTITUTIONAL ARRANGEMENTS
dc.subject LAND DEVELOPMENT
dc.subject LAND PRICES
dc.subject LAND PRICING
dc.subject LAND SUPPLY
dc.subject LAND USE
dc.subject LAND VALUE
dc.subject LARGE CITIES
dc.subject LAWS
dc.subject LEGISLATION
dc.subject LOCAL BUDGETS
dc.subject LOCAL GOVERNMENT
dc.subject LOCAL GOVERNMENT REVENUES
dc.subject LOCAL GOVERNMENTS
dc.subject LOCAL LEVEL
dc.subject LOCAL OFFICIALS
dc.subject LOCAL SPENDING
dc.subject LOCAL TAXES
dc.subject MUNICIPAL
dc.subject MUNICIPAL ACCOUNTING
dc.subject MUNICIPAL ADMINISTRATION
dc.subject MUNICIPAL BUDGETS
dc.subject MUNICIPAL CORPORATION
dc.subject MUNICIPAL FINANCE
dc.subject MUNICIPAL GOVERNMENT
dc.subject MUNICIPAL GOVERNMENTS
dc.subject MUNICIPAL INFRASTRUCTURE
dc.subject MUNICIPAL MANAGEMENT
dc.subject MUNICIPAL REVENUE
dc.subject MUNICIPALITIES
dc.subject MUNICIPALITY
dc.subject OPERATING EXPENSES
dc.subject PER CAPITA INCOME
dc.subject POLITICAL POWER
dc.subject PRIVATE SECTOR
dc.subject PRIVATIZATION
dc.subject PROPERTY TAX ASSESSMENTS
dc.subject PROPERTY TAXES
dc.subject PROVINCIAL GOVERNMENT
dc.subject PROVINCIAL GOVERNMENTS
dc.subject PUBLIC
dc.subject PUBLIC BORROWING
dc.subject PUBLIC EXPENDITURE
dc.subject PUBLIC HOUSING
dc.subject PUBLIC INVESTMENT
dc.subject PUBLIC OWNERSHIP
dc.subject PUBLIC POLICY
dc.subject PUBLIC SECTOR
dc.subject PUBLIC WORKS
dc.subject REGIONAL GOVERNMENT
dc.subject REGULATORY FRAMEWORK
dc.subject REVENUE COLLECTION
dc.subject REVENUE GROWTH
dc.subject REVENUE MOBILIZATION
dc.subject ROADS
dc.subject STATE BUDGETS
dc.subject STATE GOVERNMENT
dc.subject STATE GOVERNMENTS
dc.subject TAX
dc.subject TAX RATES
dc.subject TAX REVENUES
dc.subject TAXATION
dc.subject URBAN AREAS
dc.subject URBAN DEVELOPMENT
dc.subject URBAN INFRASTRUCTURE
dc.subject URBANIZATION
dc.subject USER CHARGES
dc.subject VACANT LAND
dc.subject WATER SUPPLY
dc.title Land Leasing and Land Sale as an Infrastructure-Financing Option en
dspace.entity.type Publication
okr.doctype Publications & Research :: Policy Research Working Paper
okr.doctype Publications & Research
okr.docurl http://documents.worldbank.org/curated/en/2006/11/7154705/land-leasing-land-sale-infrastructure-financing-option
okr.globalpractice Social, Urban, Rural and Resilience
okr.globalpractice Governance
okr.globalpractice Governance
okr.identifier.doi 10.1596/1813-9450-4043
okr.identifier.externaldocumentum 000016406_20061025121353
okr.identifier.internaldocumentum 7154705
okr.identifier.report WPS4043
okr.language.supported en
okr.pdfurl http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/10/25/000016406_20061025121353/Rendered/PDF/wps4043.pdf en
okr.region.administrative East Asia and Pacific
okr.topic Public Sector Economics
okr.topic Urban Development :: Municipal Financial Management
okr.topic Public Sector Management and Reform
okr.topic Governance :: Regional Governance
okr.topic Urban Development :: Urban Governance and Management
okr.topic Public Sector Development
okr.unit Development Research Group (DECRG)
okr.volume 1 of 1
relation.isSeriesOfPublication 26e071dc-b0bf-409c-b982-df2970295c87
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