The use of land value capture to subsidise public transport costs in South Africa
Date
2017
Authors
Nokwane, Tebogo
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Abstract
ABSTRACT This research is primarily concerned with ways in which the government, City of Johannesburg in particular can use to reclaim part of the value created by public transport investments and use that to subsidise the high costs of public transport affecting the urban poor. The research focuses on the Sandton Gautrain station as a case study, looking specifically at the influence of this station on the property prices in the area. Several international countries such as Hong Kong, the United States and Brazil have adopted the land value capture system to claw back part of the value created by public investments such as Gautrain station, however this concept has not been fully explored and applied in South Africa. In order to draw an understanding on the applicability and acceptability of the land value capture system from different sources in the municipality and property sector the qualitative research method was used. The findings illustrate that there is significant evidence that show that the Sandton Gautrain station has positively contributed to the surrounding property values. The station further attracted new developments and redevelopments in the area. In the face of the crowding in effect that the Gautrain public infrastructure has had on the real estate market, the private property owners and the municipal officials remain unwilling to accede to the application of the land value capture instruments. The municipality and the property owners both agree on the principle of further subsidisation of public transport to bring people closer to areas of economic investments such as Sandton. However, they disagree with the notion of using the land value capture as a source of subsidy. The research puts forward the recommendations that are aimed at addressing specific gaps identified as major problems and flaws characterising the understanding of the municipality on land value capture. Recommendations include using value capture as a key revenue priority, effectively capturing value at occupation before the occupation certificate of a property is issued, review of the current valuation roll to capture value in real time, the use of Special Rating Areas whereby Sandton is rated differently to reclaim value created by public infrastructure and the strengthening knowledge capacity by understudying countries already using value capture instruments.
Description
M.B.A. Thesis
Keywords
Urban transportation -- Economic aspects, Land value taxation, Land use -- South Africa.