Spatial planning, land use and housing policies are intertwined and complex. They require co-ordination across all levels of government and across policy sectors. Clearly defining the roles of central government and municipalities is key for success. Even so, land use conflicts are common, reinforcing the need for municipal cooperation. The goal of the Governance of land use project is to assist governments in creating flexible multi-level governance systems and innovative financial tools, promote cooperations, and ensure more impactful result from public investment for citizens’ wellbeing.
Land use, housing and spatial planning
Decisions on how we use land and what we build on it are long-lasting. Therefore, our decisions today need to help address the challenges of tomorrow. Using land better can reduce GHG emissions and provide more affordable housing where it is well connected to jobs and services. It can also keep important services, such as education and health, accessible in depopulating regions and reduce the cost of providing public infrastructure, such as for water or energy. Spatial and land-use planning policies play a vital role in reducing vulnerability to climate hazards, such as floods. They are essential to protect biodiversity and ensure that development does not come at the expense of our planet's – and our own – health.
Key messages
Land-based finance helps governments to fund the large investment needs for sustainable urban development efficiently and equitably. It recovers land value increases that result from public infrastructure investment and changes in land-use regulations. These gains can pay for clean transportation infrastructure, parks, affordable, energy-efficient housing in attractive areas, for example. The value uplifts can be substantial, often exceeding the cost of providing the infrastructure in the first place. The OECD International Programme for Land-Based Finance investigates how national and local governments can make better use of land-based finance.
Prioritising housing development in high-demand urban areas can increase affordable housing supply where it is most needed. It can also encourage social mixity. National governments can provide guidance to local planning policies on where housing development should occur. Dense, transport-oriented development reduces transport and energy costs of residents in the outskirts of cities and helps avoid the discomfort of long trips to work. Transit-oriented development can also alleviate social inequities and facilitate access to public services and to economic opportunities.
Context
Land-based finance instruments are used across the world
Across 60 countries where data is available, all countries excluding Uganda use some form of land-based finance at least on an occasional basis. Developer obligations, a cash or in-kind payment levied on developers that defrays the costs of infrastructure and services, are the most common instrument.
Housing costs are rapidly increasing, especially in large cities
A longstanding crisis in housing affordability has been compounding the recent cost-of-living crisis. Within countries, cities have become the focal point of this crisis, as house prices and rents have often risen more quickly than national averages.
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