UP701 Introduction to Urban Economics

*LEC9* The Value of Land

2021 1214
Assoc. Prof. Holger Gladys
 Then There Was One . Atlantic April 14, 2015

https://www.theatlantic.com/photo/2015/04/and-then-there-was-one/390501/
https://www.theatlantic.com/photo/2015/04/and-then-there-was-one/390501/
https://www.theatlantic.com/photo/2015/04/and-then-there-was-one/390501/
https://www.theatlantic.com/photo/2015/04/and-then-there-was-one/390501/
https://www.theatlantic.com/photo/2015/04/and-then-there-was-one/390501/
https://www.theatlantic.com/photo/2015/04/and-then-there-was-one/390501/
USAID Five main types of formal land tenure exist in Egypt

1 Private ownership

Freehold land is land registered with the local district office of the Land
Registration Division and owned by private persons or companies. The great
majority of agricultural land is privately owned, especially in the older, settled
rural areas.
All land not registered to private entities is technically considered to be publicly
owned, although informal tenure of unregistered land in some areas is in fact
considered to be quite secure.
There are several restrictions on agricultural landholdings. Law No. 50 of 1969
provides that an individual cannot own more than 50 feddans (about 21
hectares) of agricultural land (or its equivalent in uncultivated and desert
lands) and that a family cannot own more than 100 feddans (about 42 hectares)
of agricultural land.
The law prohibits construction of any buildings on farmland without a license
from the Ministry of Agriculture and Land Reclamation.

(Madbouly 2005; El-Hefnawi 2005; FAO 2000; Ziadeh 1978; UN-Habitat 2007).
https://www.land-links.org/country-profile/egypt/
USAID Five main types of formal land tenure exist in Egypt

2 Public ownership

Land registered as state property and not leased to a private entity is publicly
owned. Land under public ownership falls into two categories: state domain,
which includes desert or unclaimed lands and is administered by the
governorate; and public domain, which serves a public utility such as rivers,
roads, military installations, land for antiquity sites, and land set aside for
development.

(Madbouly 2005; El-Hefnawi 2005; FAO 2000; Ziadeh 1978; UN-Habitat 2007).
https://www.land-links.org/country-profile/egypt/
USAID Five main types of formal land tenure exist in Egypt

3 Publicly leased land

Land owned by the state can be leased on a long-term basis to its occupants.
These leases apply in a number of circumstances, most importantly for land in
reclaimed areas and for squatters (through a request to the governorate). In
reclaimed areas, lease rates are capped (e.g., at the cost of irrigation or at five
percent of the total land value) and rights may convert to ownership rights after
a specified period of time.

(Madbouly 2005; El-Hefnawi 2005; FAO 2000; Ziadeh 1978; UN-Habitat 2007).
https://www.land-links.org/country-profile/egypt/
USAID Five main types of formal land tenure exist in Egypt

4 Trust or Waqf land

Trust land is land set aside by the state for charitable or religious purpose and
usually administered by the Ministry of Waqf. The purpose for categorizing
land as Waqf is to prevent subdivision and to eliminate conflict among
descendants. The revenues from the land belong to the beneficiary; Waqf land
cannot be sold or mortgaged.

(Madbouly 2005; El-Hefnawi 2005; FAO 2000; Ziadeh 1978; UN-Habitat 2007).
https://www.land-links.org/country-profile/egypt/
USAID Five main types of formal land tenure exist in Egypt

5 Encroachment or Wad Al Ayad

The Civil Code makes it possible for the possessor or user of a plot of land to
gain ownership of that land if it is occupied continuously for 15 years without
the owner asserting rights.

(Madbouly 2005; El-Hefnawi 2005; FAO 2000; Ziadeh 1978; UN-Habitat 2007).
https://www.land-links.org/country-profile/egypt/
Dalia Wahdan notes on land management in Egypt:

6 Tenure as a state of mind

Tenure [the act, right, manner, or term of holding something, such as a landed
property] is not necessarily a legal title [which refers to a “bundle of rights” to a
property: the right of possession, right of control, right of exclusion, right of
disposition, etc.] it is also – and sometimes only – a state of mind.

This is in part due to historical institutions such as the Waqf (endowments)

and/or hand-claims. There are also instances of collective ownership (legal or
habitual).

In addition to tenure imperfections, there are also market imperfections due

mainly to a) absence of information on land, b) inordinate land sale systems
and c) unregulated land valuation mechanisms. All three are obstacles to ‘free
and fair competition,’ the primary assumption for effective markets in land or
commodities.
Land underpins all the key aspects
of the New Urban Agenda because
land is a key driver for inclusive,
sustainable urban development.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
What is the New Urban Agenda, abbreviated NUA?

The New Urban Agenda was adopted at the United Nations Conference on
Housing and Sustainable Urban Development (Habitat III) in Quito, Ecuador,
on 20 October 2016. It was endorsed by the United Nations General Assembly
at its sixty-eighth plenary meeting of the seventy-first session on 23 December
2016.

The New Urban Agenda represents a shared vision for a better and more
sustainable future. If well-planned and well-managed, urbanization can be a
powerful tool for sustainable development for both developing and developed
countries.

Please visit the website http://habitat3.org/the-new-urban-agenda/ to download the agenda, glossary and other
documents.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
People and the New Urban Agenda

The New Urban Agenda (NUA) is about people. People need a place to live in
dignity and a place means land; land for housing, working, education,
commercial activities, leisure, transport etc.

Today’s high population growth puts increasing pressure on land, which in turn
becomes increasingly scarce. We are at a turning point! The use of and access to
land need to be managed with care and responsibility in order to harness the
transformative potential of the NUA, in particular in situations where cities
need to grow.

Governments that ensure affordable and equitable access to land, tenure

security for all, that establish frameworks to ensure the sustainable use of land
and mechanisms to generate revenue from land, can guide and finance
sustainable urban development and create inclusive and resilient cities.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
Land and the New Urban Agenda

Governments that do not regulate access to land and land use, leaving
everything to the market and the elites, and that do not benefit from land value
increase cannot influence urban development, but they do risk conflicts, social
instability and unrest, a negative impact on climate, and disaster.

Security of land tenure and sustainable land use together with responsible land
governance are at the core of managing land responsibly. This ultimately
contributes to the majority of overall (urban) policy objectives, including
poverty reduction, gender equality, inclusiveness, integration, provision of
adequate housing for all, local economic development and employment, etc.
The responsible management of land rights and uses, therefore, is a
transformative mechanism to achieve peaceful, inclusive, safe, sustainable and
resilient settlements.

When finalizing the New Urban Agenda, United Nations Member States should
address land as a key focus area and include land in all types of human
settlements: urban, peri-urban and rural, rich and poor.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
New Urban Agenda | Ensure tenure security for all:

The New Urban Agenda should stress that no one should be left behind
concerning land rights. It should confirm that it is the state’s duty to recognize,
respect and safeguard all legitimate land tenure rights along the continuum of
rights, including informal and customary tenure, and to promote and facilitate
the enjoyment of them.

The New Urban Agenda should confirm that businesses have a responsibility to
respect human rights and legitimate land tenure rights. The New Urban Agenda
should also promote durable solutions for displaced people.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
Tenure security for all matters
because it is the basis for adequate
housing for all, private responsible
investment and the overall
prosperity of an inclusive and safe
city.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
New Urban Agenda | Ensure sustainable land use by:

o stressing the responsible public regulation of land use, determined by the

long-term interests of the public, in particular the affected communities;

o stressing the high priority of minimizing land consumption while planning

at scale for the expected population growth to reduce the ecological footprint
of settlements, to protect nature and to conserve cultural landscapes;

o promoting respect for the social function of land and promote the provision
of safe public space responding to the needs of all;

o promoting land management tools such as spatial planning, land re-adjust-

ment and land sharing that provide huge opportunities for sustainable urban
development; and

o highlighting the importance of balanced territorial development.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
Sustainable land use matters
because it allows for a balance
between the different needs and
interests of all urban inhabitants,
which makes cities and human
settlements inclusive and safe.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
New Urban Agenda | Generate land-based revenues and stress the potential of:

o establishing transparent, fair and effective land value sharing mechanisms

for the benefit of all, e.g. land value capture, betterment levies and sale of
development rights;

o selecting one or several types of land taxation adjusted to local conditions,

e.g. land acquisition, land holding, land sales and land value increment tax;
and

o developing and implementing a strategy on land banking and generating

income from public land.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
Land-based revenues are fair and
socially sustainable because those
who benefit more from urbanization
contribute more to its costs; they
matter because they expand the
revenue base of local governments,
which enables them to finance
inclusive urban development.
2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
New Urban Agenda | Enable responsible land governance through:

o the promotion of transparent and responsible public land administration

and management;

o the promotion of accountability, transparency and participation by all when

managing land;

o the establishment and implementation of national land policies, laws and

standards in accordance with international law;

o the creation of short, simple, affordable procedures and standards adjusted

to local requirements;

o customer-friendly delivery systems that are effective and efficient, accessible

and affordable, accountable and transparent, that exploiting digital and
communication technologies as well as the wide range of data and
information, including geo-spatial information.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
Responsible land governance
matters because it protects cities
from land-based corruption and can
solve and prevent conflicts and
social unrest, leading to much more
inclusive and sustainable cities.

2016 UN Habitat and Global Land Tool Network (GLTN): Land in the New Urban Agenda - A Briefing Note for
Policy Makers http://www.suelourbano.org/wp-content/uploads/2016/08/Land-and-the-New-Urban-Agenda-A-
Briefing-Note-for-Policy-Makers.pdf
Add-in term clarifications:

o Highest and best use: The reasonably probable and use of vacant land or an
improved property that meets the four criteria of (1) legal permissibility, (2) physical
possibility, (3) financial feasibility, and (4) maximum productivity, and that results in
the highest value.

o Land value capture: Land value capture is a policy approach that enables
communities to recover and reinvest land value increases that result from public
investment and government actions. Land value capture is rooted in the notion that
public action should generate public benefit.

Land value capture requires sufficient land registries to track and tax property
ownership.

One common tool used by local governments to apply land value capture is through
property taxes, which (A) provide stable revenue, and (B) allows to reinvest or
redirect the tax money to public services and soft or hard infrastructure that benefit
the community.

Analog to property taxes, betterment levies are a form of district tax or fee levied on
land that has gained in value because of public infrastructure investments. These
districts levy a special assessment on the increment in land values caused by public
infrastructure improvements
Add-in on Singapore’s communal services including property price information:

https://www.sla.gov.sg/geospatial-development-and-services/onemap; https://www.onemap.gov.sg/main/v2/

The New OneMap is the authoritative national map of Singapore with the most detailed and timely updated
information developed by the Singapore Land Authority. The New OneMap can be used to obtain street-level
geospatial information, or narrowed to specific query such as land ownership, the nearest schools and
demographic data at/around a location. Download the OneMap mobile app in Google Play or Apple App Store or
visit the web portal at www.onemap.sg If you require solutions related to the use of SLA Data and Maps, please
visit our INLIS portal for more information.
Add-in information on Real Estate Registration: Egypt's government to amend
Real Estate Registration Law, postpone enforcement till January [2022]
Ahmed Morsy , Sunday 28 Feb 2021 https://english.ahram.org.eg/News/405025.aspx

Egypt’s cabinet will submit a draft law to the House of Representatives to amend Real Estate Registration Law 186/2020,
which had previously amended some provisions of Law 114/1946, a cabinet statement said on Sunday following a
ministerial meeting. These new proposed amendments, the statement added, will give authority to the cabinet to delay the
enforcement of the new Real Estate Registration Law — which was initially set for 6 March — till the end of December
2021. According to Law 186/2020, which was approved by the House last August, citizens are required to pay new fees in
order to register properties at the Real Estate Registration and Notarization Authority starting 6 March. These new
registration fees range from EGP 500 for properties up to 100 square meters to EGP 2,000 for properties exceeding 300
square meters. The new fees, according to amendments to the law that were approved in 2020, would to be paid when
property owners request a government agency install facilities such as water, gas, or electricity meters or when they apply
to transfer ownership of the property. Property owners already pay a fee of 2.5 percent on property value, known as the
Real Estate Disposal Tax, a provision which has been in place since 1939 and is a component of personal income taxes.

The new Real Estate Registration Law has stirred controversy on social media platforms and among the public in general in
the past several days as the initially scheduled date of enforcement approached. “Postponing the enforcement of this law
until the end of this year will provide an opportunity to cooperate with parliament in putting forward some new ideas to
make things easier for citizens and motivate them to register [their properties],” Prime Minister Mostafa Madbouly said on
Sunday. On top of these ideas, Madbouly says, would be separating the process of the payment of the Real Estate Disposal
Tax and completing the Real Estate Registration Procedures.

Madbouly stressed that the first goal of the state is the interest of the citizens. “About 95 percent of our real estate in Egypt
is unregistered, and the government hopes that all citizens will register their properties, with the aim of securing their
properties,” the prime minister said, stressing that the government would work on its part to facilitate the procedures for
real estate registration. Meanwhile, Minister of Justice Omar Marawan stated that registering at real estate and
notarization offices allows the state to take stock of real estate wealth, create an identity for each property, and give space
to the planned expansion of construction sites. Registering also secures citizens’ ownership rights and maximizes their
benefits; regulates and boosts the real estate market; and, simultaneously, eradicates the phenomenon of illegal
construction and slums, Marawan added. On Wednesday, Madbouly ordered the formation of a ministerial committee to
facilitate the procedures required for registering real estate. He also ordered that the procedures and the objective of
registration be explained to citizens in order to prevent the spread of rumors and false information on this issue.