Land Value Creation, Capture, and Destruction: Hudson Yards and its Discontents

Authors: Rachel Weber*, University of Illinois At Chicago, Bridget Fisher, New School
Topics: Urban Geography, Urban and Regional Planning, Economic Geography
Keywords: capital financing, urban geography, fiscal geography, financialization
Session Type: Virtual Paper
Day: 4/7/2021
Start / End Time: 3:05 PM / 4:20 PM
Room: Virtual 34
Presentation File: No File Uploaded

Evaluations of land value capture (LVC) techniques often assume a causal link between public investment and subsequent appreciation and that captured tax revenues will be sufficient to subsidize present-day capital expenses. In order for the new value to be captured, however, it must first exist. We argue that property values are determined by the calculative and political practices that construct, capture, and destroy them. The underlying property values necessary for the success of LVC schemes are multiple, dynamic, and frequently contested. Specifically, public land value capture schemes compete with the private sector impulse to extract rents from land, the latter often leading to attempts to lower values to avoid taxation. The true cost of capital investments, the pace of capitalization, struggles to claim the new value in targeted areas, and the magnitude of spillover effects will all affect the degree to which the promise of LVC is realized. We provide examples from a financial analysis of the Hudson Yards mega-development in Manhattan to show how the flexibility of property values allows the taxes on them to be used at cross-purposes, jeopardizing the payback streams and inflating risks shouldered by the public sector.

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