Land value capture and transit oriented development as a way of funding railway systems: The case of Hong Kong Rail + Property Model

Land value capture and transit oriented development as a way of funding railway systems: The case of Hong Kong Rail + Property Model

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Jauregui-Fung, Franco
Mitarbeiter sonstige

Bonn: German Institute of Development and Sustainability (IDOS)

DOI: https://doi.org/10.23661/r3.2022

Railway systems are essential in high-density urban areas in emerging economies, but cities and their transit agencies struggle to finance them due to the high upfront-investment costs, continuous maintenance, and network expansion costs. However, when transit planning is integrated with land-use planning in favour of transit-oriented development (TOD) strategies, land value capture (LVC) can be generated to cover part of the costs to finance transit infrastructure. In Hong Kong, the Mass Transit Railway Corporation (MTRC) has successfully implemented its metro system through its Rail+Property (R+P) model, a public-private cooperation with a government-led approach. This development-based LVC mechanism provides development rights from the government to the MTRC for master planning, property development and management. This has enabled the expansion of the MTRC portfolio beyond transport operations, such as residential and commercial development, property leasing and management, consultancy services, etc. This study not only presents the policies that have allowed the success of the R+P model, but also raises the question about its replicability in other contexts without the same particular conditions of Hong Kong. This contributes to draw policy lessons for the integration of transit and land-use planning and the use of LVC mechanisms for the financing of railway systems.

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Jauregui Fung, Franco

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Jauregui Fung

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