[Document below en Espanol]
GLOBAL LAND TOOL NETWORK
FOR PRO POOR LAND TOOL DEVELOPMENT
TERMS OF REFERENCE
DEVELOPMENT OF GLTN TOOL ON
LAND VALUE TAXATION
ACTIVITIES 1 JANUARY 2007 – 31 AUGUST 2007
|1. BACKGROUND|| 2|
|1.1 Background to GLTN|| 2|
|1.2 Background to land value taxation and capture (LVT/C)|| 2|
|2. DEVELOPMENT GOALS|| 3|
|2.1 Specific development goals|| 3|
|3. PROJECT GOALS|| 4|
|3.1 Specific project goals|| 4|
|4. ACTIVITIES|| 5|
|4.1 Specific project activities|| 6|
|5. METHODOLOGY|| 6|
|6. OUTPUTS|| 6|
|6.1 Specific project outputs|| 6|
|7. MONITORING AND EVALUATION|| 7|
|8. RISKS|| 7|
|9. BUDGET AND TIME FRAME|| 8|
Nairobi, 1 November 2006
1.1 Background to GLTN
There are few more contentious and complex problems in the world than those dealing with land and secure tenure. Many religions have firm rules on land and inheritance, most communities have deeply ingrained cultural traditions, and every government faces the challenge of land differently with its own vast array of laws and with varying degrees of political will. In many countries the rules work against women owning land for a range of reasons from poverty to custom. In wealthy countries land records cover most of the territory and are generally well kept. However, few developing countries have more than 30 per cent of their land accounted for by land records. Land records are also often linked to the middle and commercial classes. In many countries, there is large-scale corruption associated with land. In post conflict societies, land is a key issue as it is often closely associated with the conflict. Sound land governance approaches are therefore primary in building peace.
GLTN aims to establish a continuum of land rights, rather than just focus on individual land titling; improve and develop pro poor land management as well as land tenure tools; unblock existing initiatives; assist in strengthening existing land networks; improve global coordination on land; assist in the development of gendered tools which are affordable and useful to the grassroots; and improve the general dissemination of knowledge about how to implement security of tenure.
The themes within GLTN are the following. 1. Land rights, records and registration; 2. Land use planning; 3. Land Management, Administration and Information; 4. Land law and enforcement; 5. Land Value Taxation and; 6. Cross cutting issues.
1.2 Background to land value taxation and capture (LVT/C)
Looking first at the instrumental justifications, paying this fee encourages a landowner to develop vacant and under-utilized land to the full extent that its value warrants, or to make way for others who will. Sites are consequently used more efficiently, dilapidated inner-city areas are returned to good use, which reduces urban sprawl. LVT deters speculative land holding and enables a society to provide sustainable and wider access to the use of land. This allows women and men, poor and affluent, uneducated or well educated, all to gain access to land in more affordable manner. It enables secure land tenure by owners willing to pay for the land advantages they find important. This approach to revenue production stimulates new business and new employment, reducing the need for government assistance.
Economically LVT makes sense because, it does not distort market mechanisms or otherwise burden the economy the way most other taxes do. It is a cheap and efficient levy to administer because much less effort is required to track land ownership and value than to track income or sales transactions. Tax evasion on land is much more difficult than on financial wealth because land cannot be hidden, removed to a tax haven, or concealed in an electronic data system. Even in the poorest of communities the tools are readily available to implement this policy.
There are also compelling moral reasons for LVT. Land (unlike goods and services) has no cost of production. If an ample supply of land of equal desirability were available everywhere, there would be nothing to pay for its use. In reality land acquires a scarcity value owing to the competing needs of community members for living, working and leisure space. Thus land value owes nothing to individual effort and everything to the community at large. It belongs justly and uniquely to the community. Conversely, the reward for individual effort rightfully belongs to the one who earns it. Because of differences in location, fertility or natural resources, some places are more advantageous than others. Only demand for access to these advantages gives land its value.
Land values are created mainly by factors that are not the result of the landowner's own effort; for example, the creation of new infrastructure, new public transportation, or re-zoning. All can radically change the value of a piece of land. LVT provides a method of recouping windfall changes to land value that occur as a result of investment by the community, placing less of the burden on taxpayers who don't directly benefit. This allows reductions in existing taxes on labor (wages) and enterprise (sales). The LVT is progressive because the land tax cannot be passed on to a tenant; competitive markets, and not landlord overheads set rental prices.
The natural world is rightfully the common property of all persons, and therefore the LVT is not really a tax, but simply the collection of rent (a user fee) on behalf of the community. For eight thousand years worldwide, LVT has been the primary basis for producing public revenue and is easy for people to understand. LVT is the appropriate instrument for the urgent fight against global inequity and poverty.
2. DEVELOPMENT GOALS
To facilitate the attainment of the Millennium Declaration and the MDGs through improved land management and tenure tools for poverty alleviation.
For MDG Goal 7, Target 11 and the Global Campaign for Secure Tenure objectives to be achieved, it is crucial that concrete tools related to urban land and secure tenure can be provided to all stakeholders. In addition MDG 3 on empowerment of women which has been expanded to include women’s property rights as one of the indicators requires the gendering of tools. Specifically, the mandate related to the Global Campaign for Secure Tenure is directly inspired from the Habitat Agenda and the Istanbul Declaration in terms of which Governments made a number of commitments.
Also, in December 2004 the General Assembly passed a resolution which ‘Encourages Governments to support the UN-HABITAT’s Global Campaign for Secure Tenure and Global Campaign for Urban Governance as important tools for, inter alia, promoting administration of land and property rights, in accordance with national circumstances, and enhancing access to affordable credit by the urban poor.’ (Resolution A/59/484, ‘Implementation of the outcome of the United Nations Conference on Human Settlements (Habitat II) and of the twenty-fifth special session of the General Assembly.’).
2.1 Specific development goals
Land value taxation and capture is the practice of creating local and/or state revenue by charging each title holder (or equivalent according to the continuum of land rights) to land a portion (%) of the value of the site but not for buildings. LVT/C can be used to produce revenue for public purposes and for fostering more efficient use of land, including natural resources. The poor would benefits from LVT via i.e. cross subsidies regarding infrastructure etc.
Without land tax there is vast amount of speculation in land which is pushing the price of land sky high and making it unaffordable for the poor in cities. This is especially important for regions where political patronage is linked to land.
The HABITAT II Agenda Section B.55 states that: “Access to land and legal security of tenure are strategic prerequisites for the provision of adequate shelter for all and for the development of sustainable human settlements affecting both urban and rural areas. It is also one way of breaking the vicious circle of poverty. Every Government must show a commitment to promoting the provision of an adequate supply of land in the context of sustainable land-use policies. While recognizing the existence of different national laws and/or systems of land tenure, Governments at the appropriate levels, including local authorities, should nevertheless strive to remove all possible obstacles that may hamper equitable access to land and ensure that equal rights of women and men related to land and property are protected under the law. The failure to adopt, at all levels, appropriate rural and urban land policies and land management practices remains a primary cause of inequity and poverty. It is also the cause of increased living costs, the occupation of hazard-prone land, environmental degradation and the increased vulnerability of urban and rural habitats, affecting all people, especially disadvantaged and vulnerable groups, people living in poverty and low-income people.”
Section B.56, recommends 14 actions that can be taken to “ensure an adequate supply of serviceable land” including the following inter alia: Decentralize land management responsibilities and provide local capacity-building programmes; Apply transparent, comprehensive and equitable fiscal incentive mechanisms, as appropriate, to stimulate the efficient, accessible and environmentally sound use of land, and utilize land-based and other forms of taxation in mobilizing financial resources for service provision by local authorities; Consider fiscal and other measures, as appropriate, to promote the efficient functioning of the market for vacant land, ensuring the supply of housing and land for shelter development; Develop and implement land information systems and practices for managing land, including land value assessment, and seek to ensure that such information is readily available; Make full use of existing infrastructure in urban areas, encouraging optimal density of the occupation of available serviced land in accordance with its carrying capacity; Consider the adoption of innovative instruments that capture gains in land value and recover public investments; Develop appropriate cadastral systems and streamline land registration procedures in order to facilitate the regularization of informal settlements, where appropriate, and simplify land transactions; Mobilize local and regional expertise to promote research, the transfer of technology and education programmes to support land administration systems…”
Sound LVT/C policies create incentives for substantial improvement in the housing stock, provides the basis for self-financing cities, enables the benefits of the market system, and secures a fair distribution of wealth.
3. PROJECT GOALS
The Global Land Tool Network will focus on the development of pro poor gendered large scale land tools which currently do not exist at country and global level and which will unblock the delivery of the MDGs, especially Goal 7, target 11. The focus is on affordable land record, land tax, land information, land administration and management and land planning systems, within a governance framework. Specific goals include:-
3.1 Specific project goals
- The development of pro poor gendered land tools
- Unblocking potential innovations and adding value
- Research, documentation, dissemination of knowledge
- Strengthening global comprehensiveness (Paris declaration on HAC)
- Improving the security of tenure of the poor
- MDG goals - indicators/benchmarks
- Cross cutting issues include developing world, post conflict, environment and rural and urban.
The LVT/C capacity building program seeks to enable implementation of the UN-HABITAT 1996 Action Agenda recommendations for land value capture and land based tax policy. The training material will be available via Internet to public officials, NGO and grassroots leaders, and others who are committed to ensuring access to land for affordable shelter for all.
The training will focus in particular on the capture of land value for public revenue and the land tools that are crucial to the successful implementation of this policy, such as land assessments, cadastral systems, and land registration. High-quality and affordable information reliable, timely, and user-friendly will be presented to help prepare governments for implementing these fiscal approaches, which, among other benefits, can create incentives for improvement in the housing stock.
Some examples of the overall GLTN activities would include:-
- Development of normative approaches for the purpose of increasing security of tenure for the urban poor in Member States.
- Advocacy – presentation of findings in range of forums.
- Expert Group Meetings (EGMs) and Regional workshops for the transfer of knowledge.
- Commissioning of key research and tool development.
- Interactive conferences via Internet and ongoing website development.
- Publications – recurrent and non recurrent.
- Management of knowledge (dissemination, data base development of contacts, filing, library etc).
- Building partnerships and research associates, including with grassroots organisations (NGOs, CBOs).
- Improvement of implementation methodologies especially in regard to grassroots and gender.
Specific GLTN activities will include:-
- Administrative and institutional up-scaling, also through an administrative counterpart.
- Tool development activities, including specifically a training and capacity building component, gender mechanism, Islamic component, the development of a grassroots mechanism, a post conflict component, land administration and information component, the development of an environmental framework and the up-scaling of existing tool work.
- Moving towards harmonisation of global partners.
Some of the specific tools, which will cover both developing countries and post crisis areas, would include:-
- Land administration and governance tools (e.g. guidelines for the transformation of a land agency and the decentralisation of functions).
- Guidelines for land administration in post conflict societies.
- Pro poor regulatory frameworks (e.g. user fees).
- Appropriate spatial units for planning slums (e.g. as core data which can take the place of cadastral data).
- Robust enumerations for slums.
- Measuring tenure security for the MDGs.
- Continuum of land rights beyond land titling.
- Key characteristics of a gendered land tool.
Some work on these tools has already been started, but this needs to be upscaled, piloted, documented and generally made more robust and comprehensive.
4.1 Specific project activities
The specific project activities will be twofold:
- To document existing best practices and lessons learned on LVT/C.
- To disseminate existing best practices and lessons learned on LVT/C.
- To develop a curriculum for a short Internet based course on LVT/C.
The following components will be applicable:
- Develop explanatory documents on LVC/T (global coverage)
- Develop SWOT analysis on LVC/T (financial/social/environmental with global coverage)
- Examples of existing LVC/T initiatives (global coverage, country specific examples)
- Specific SWOT on existing examples of LVC/T (global as well as country specific)
- Statements by key individuals/institutions on LVC/T (global coverage)
- Develop a curriculum for and the design of a short online course on LVC/T (approximately 8h Internet time and 16h offline time)
- Develop an online LVC/T calculator/simulator where a council/country can enter their own data and then elaborate different LVC/T solutions seeing the results in the LVC/T calculator/simulator. Calculator ought to be available on www.gltn.net.
- Develop brief brochure on LVC/T. (Edit/design and production by external partners, not in this contract).
The above is to be disseminated and available via the GLTN website at www.gltn.net (see also 5 below).
The consultants will collect and edit relevant information (see 4.1) and upload the documents to the GLTN website. The GLTN administrative counterpart will assist in developing the GLTN website to also adequately include LVT/C issues in accordance to this project proposal.
6.1 Specific project outputs
- The management of knowledge is carried out in such a way that it leads to improved tenure security for the citizens of Member States, particularly for women.
2. More appropriate regulatory/legal frameworks in countries for the urban poor.
3. Pro-poor tools that can be used by countries and their professionals and legal aid networks.
4. Contribution to the development of PRSPs, as well as to Harmonisation and Alignment in the land sector.
5. Continuous update of Global Trends in terms of land.
6. Best Practices to assist countries implement the MDGs.
7. Knowledge transferred to policy makers, consultants, partners and associates.
The outputs are further described in 4.1 above. The information to be captured and presented ought to give answer to the following questions:
- Where has LVT been implemented so far and what are the results?
- How does a council with limited resources assess land values?
- How would LVT be implemented in a small community with limited resources and what are the barriers?
- How is it best managed to tax existing landowners who have not been taxed in the past?
- Given that land tax can be imposed on poor, how is that best managed without causing market evictions?
- What is the way forward if there is no valuation profession in place in the country?
In regard to monitoring, the following requests are valid:
7. MONITORING AND EVALUATION
- An inception report should be delivered by 1st February 2007 to assess whether the consultants have understood the terms of reference/project proposal.
- A mid term interim report should be delivered by 1st May 2007 to ensure proper dialogue with the consultants.
- A final report to describe the achievements together with a financial report.
Monitoring and evaluation of the counterpart will include specific monitoring and evaluation steps such as:-
- Financial reporting.
- Gender relations.
- Quality of developed information on Internet.
- Quality of publications.
- Quality of online course.
There is a risk at the stage of LVT/C implementation that local partners would be forced to drop out if the political winds were to change to dislike public recovery of land rent. The consultant will seek to minimize this risk by carefully bringing in a number of stakeholders, including landowners, at an early stage of policy implementation.
There is some risk that the LVT/C data might be lacking or unreliable, but with extant mathematical formulas data can be extrapolated to provide reasonable approximations. Methods ought to be developed to secure the needed data.