National Bank, Canada report – Land value capture: could it finance public transit?
National Bank of Canada is pleased to team up with internationally renowned public transit expert Dr. George Hazel and his team of international experts to make public this report on land value capture for Greater Montréal. To find solutions to Québec’s public finance issues and contribute to Greater Montréal’s economic growth, National Bank of Canada has taken the initiative to mandate Dr. George Hazel and his team to analyse a new source of financing for public transit: land value capture.
Editorial: Land-value capture has merit
(An extract of the Montreal Gazette article, Editorial: Land-value capture has merit, March 5, 2015)
It’s a shame that Quebec Transport Minister Robert Poëti so badly botched his explanation of an alternative way of financing public infrastructure projects that is gaining ground around the world. After using the T-word and causing many to erroneously understand the government was considering taxing people for the benefit of living near public transit, Poëti last week issued a late-night communiqué backing away from the idea. That’s unfortunate, because what he was really talking about was a concept known as land-value capture. This revenue tool can take many forms, including taxation, but generally it seeks to get the private sector — which often profits handsomely from public investment in transit — to participate in the financing of projects it will stand to benefit from. A major report on land-value capture put out by the National Bank last year says that across North America, transit infrastructure can raise property values by up to 120 per cent. In Montreal, data show land values jump on average 13 per cent within a 500-metre radius of transit stations, 10 per cent within 1 kilometre and 5 per cent within 1.5 kilometres. As the name of the term suggests, land-value capture seeks to unlock the riches generated from public investment, which can amount to billions of dollars that usually remain in private pockets.