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

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dc.contributor.authorPeterson, George E.
dc.date.accessioned2012-06-26T14:38:37Z
dc.date.available2012-06-26T14:38:37Z
dc.date.issued2006-11
dc.description.abstractMunicipal 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.identifierhttp://documents.worldbank.org/curated/en/2006/11/7154705/land-leasing-land-sale-infrastructure-financing-option
dc.identifier.doi10.1596/1813-9450-4043
dc.identifier.urihttps://hdl.handle.net/10986/9020
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 4043
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCESS TO LAND
dc.subjectASSET SALES
dc.subjectASSETS
dc.subjectAUCTIONS
dc.subjectBETTERMENT TAXES
dc.subjectBONDS
dc.subjectCAPITAL BUDGETS
dc.subjectCAPITAL COSTS
dc.subjectCAPITAL PROJECTS
dc.subjectCITIES
dc.subjectCOLLATERAL
dc.subjectDEBT
dc.subjectDEBT SERVICE
dc.subjectDEVELOPMENT AUTHORITIES
dc.subjectDEVELOPMENT BANKS
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC PERFORMANCE
dc.subjectFISCAL CAPACITY
dc.subjectFISCAL DECENTRALIZATION
dc.subjectFISCAL DEFICITS
dc.subjectFISCAL MANAGEMENT
dc.subjectFISCAL REFORMS
dc.subjectFISCAL RESPONSIBILITY
dc.subjectHOUSING
dc.subjectINCOME
dc.subjectINFRASTRUCTURE LOANS
dc.subjectINSTITUTIONAL ARRANGEMENTS
dc.subjectLAND DEVELOPMENT
dc.subjectLAND PRICES
dc.subjectLAND PRICING
dc.subjectLAND SUPPLY
dc.subjectLAND USE
dc.subjectLAND VALUE
dc.subjectLARGE CITIES
dc.subjectLAWS
dc.subjectLEGISLATION
dc.subjectLOCAL BUDGETS
dc.subjectLOCAL GOVERNMENT
dc.subjectLOCAL GOVERNMENT REVENUES
dc.subjectLOCAL GOVERNMENTS
dc.subjectLOCAL LEVEL
dc.subjectLOCAL OFFICIALS
dc.subjectLOCAL SPENDING
dc.subjectLOCAL TAXES
dc.subjectMUNICIPAL
dc.subjectMUNICIPAL ACCOUNTING
dc.subjectMUNICIPAL ADMINISTRATION
dc.subjectMUNICIPAL BUDGETS
dc.subjectMUNICIPAL CORPORATION
dc.subjectMUNICIPAL FINANCE
dc.subjectMUNICIPAL GOVERNMENT
dc.subjectMUNICIPAL GOVERNMENTS
dc.subjectMUNICIPAL INFRASTRUCTURE
dc.subjectMUNICIPAL MANAGEMENT
dc.subjectMUNICIPAL REVENUE
dc.subjectMUNICIPALITIES
dc.subjectMUNICIPALITY
dc.subjectOPERATING EXPENSES
dc.subjectPER CAPITA INCOME
dc.subjectPOLITICAL POWER
dc.subjectPRIVATE SECTOR
dc.subjectPRIVATIZATION
dc.subjectPROPERTY TAX ASSESSMENTS
dc.subjectPROPERTY TAXES
dc.subjectPROVINCIAL GOVERNMENT
dc.subjectPROVINCIAL GOVERNMENTS
dc.subjectPUBLIC
dc.subjectPUBLIC BORROWING
dc.subjectPUBLIC EXPENDITURE
dc.subjectPUBLIC HOUSING
dc.subjectPUBLIC INVESTMENT
dc.subjectPUBLIC OWNERSHIP
dc.subjectPUBLIC POLICY
dc.subjectPUBLIC SECTOR
dc.subjectPUBLIC WORKS
dc.subjectREGIONAL GOVERNMENT
dc.subjectREGULATORY FRAMEWORK
dc.subjectREVENUE COLLECTION
dc.subjectREVENUE GROWTH
dc.subjectREVENUE MOBILIZATION
dc.subjectROADS
dc.subjectSTATE BUDGETS
dc.subjectSTATE GOVERNMENT
dc.subjectSTATE GOVERNMENTS
dc.subjectTAX
dc.subjectTAX RATES
dc.subjectTAX REVENUES
dc.subjectTAXATION
dc.subjectURBAN AREAS
dc.subjectURBAN DEVELOPMENT
dc.subjectURBAN INFRASTRUCTURE
dc.subjectURBANIZATION
dc.subjectUSER CHARGES
dc.subjectVACANT LAND
dc.subjectWATER SUPPLY
dc.titleLand Leasing and Land Sale as an Infrastructure-Financing Optionen
dspace.entity.typePublication
okr.crossref.titleLand Leasing And Land Sale As An Infrastructure-Financing Option
okr.date.doiregistration2025-04-10T07:21:57.822692Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2006/11/7154705/land-leasing-land-sale-infrastructure-financing-option
okr.globalpracticeSocial, Urban, Rural and Resilience
okr.globalpracticeGovernance
okr.globalpracticeGovernance
okr.guid133061468142165168
okr.identifier.doi10.1596/1813-9450-4043
okr.identifier.externaldocumentum000016406_20061025121353
okr.identifier.internaldocumentum7154705
okr.identifier.reportWPS4043
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/10/25/000016406_20061025121353/Rendered/PDF/wps4043.pdfen
okr.region.administrativeEast Asia and Pacific
okr.topicPublic Sector Economics
okr.topicUrban Development::Municipal Financial Management
okr.topicPublic Sector Management and Reform
okr.topicGovernance::Regional Governance
okr.topicUrban Development::Urban Governance and Management
okr.topicPublic Sector Development
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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