Land value capture and the service-funding tradeoff — what a district can actually afford, and what it gives up in order to afford it.
26 April 2027
The argument#
Public investment creates land value that a district can recapture, but recapture has a ceiling, and once the ceiling is reached the budget stops being a constraint on the design and becomes the design — because the only remaining question is which metric you cut.
What you will learn#
- State the four revenue lines in the current build and each one’s share of monthly income.
- Distinguish a tax-rate change from a budget-slider change by naming exactly what each one alters and on what delay.
- Close an imposed ₡9,000 / month deficit in three different ways and cost each one in mobility performance and livability.
- Read the land value info-view and attribute a specific value increase to a specific public investment.
Theory into practice#
- Henry George, Progress and Poverty (1879). Land value is created by the presence and investment of the community rather than by the owner, so the unimproved value of land is the just base for public revenue.
- Joseph Stiglitz, “The Theory of Local Public Goods” (1977), and Arnott and Stiglitz (1979) — the Henry George theorem. Under a set of idealising conditions, the aggregate land rent generated by a public good is exactly sufficient to pay for it.
- Charles Tiebout, “A Pure Theory of Local Expenditures”, Journal of Political Economy (1956). Households sort between jurisdictions according to the bundle of taxes and services on offer.
- William Vickrey, on land taxation and marginal-cost pricing (1963; “Defining Land Value for Taxation Purposes”, 1970). A tax on land does not discourage the thing being taxed, unlike a tax on building or on activity.
- Donald Shoup, The High Cost of Free Parking (2005). A public good supplied without a price is a subsidy whose cost appears somewhere else in the budget.
The deck walks through where each of these lands, slide by slide, against the corridor’s own budget.
Simulation mapping#
| Theory move | Cities: Skylines II mechanic | What students should watch happen |
|---|---|---|
| George: the community creates land value | the land value info-view | Place a square in Ockley Green and the overlay lifts two blocks either side before a single building changes |
| Henry George theorem: land rent funds the public good | tax rates set per zone type and per education level, against unchanged buildings | The tax take from Ockley Green rises with no rezoning, no growth and no rate change |
| Tiebout: households sort by the tax-and-service bundle | demand bars by wealth and education level | Push residential tax past roughly 13% and high-education demand falls before low-education demand moves |
| Vickrey: a good tax does not distort what you want more of | the tax-rate panel against the budget sliders | The tax slider changes who arrives; the budget slider changes what they get when they do |
| Shoup: an unpriced service is a subsidy paid elsewhere | one-off road build cost against permanent road upkeep | The Kerrow corridor’s arterial upkeep line grows every time the road is widened, and never falls |
| — (mechanic with no single theory anchor) | the per-service budget sliders | At 70% funding a school’s capacity and coverage shrink faster than its cost does |
Evidence standard. Named interface fields are direct readouts. Calculations shown from those fields are derived measures. Every fixed scenario value on this page is a worked hypothetical, not a captured run. See resources and evidence for access arrangements and worksheets.
The decision this week#
Mobility performance against livability, with fiscal performance held fixed as the binding constraint. That is the shape of this week and it is deliberately different from Week 7’s.
The imposed cut is 22% of eligible allocated monthly outlay. The deck’s separate ₡9,000 worked example illustrates alternative closures; it is not the studio target. Protect both utility increments before choosing which remaining services lose funding.
Into the studio#
Monday is the budget charrette. Bring the unchanged Week 7 personal save and total the district allocation worksheet. Remove 22% of eligible monthly outlay once, protecting both utility increments once the room funds them as Line zero. Compare the paper closure with the nearest issued branch, label mismatches, and sign the unfunded list. No fixed deficit is applied to the personal save. Upload the save and worksheet by 21:00; follow the studio brief.
Assessment connection#
Feeds Assessment 2 — Public Realm & Infrastructure Plan (due Week 9, 25%), principally its fiscal 30 criterion: the plan is expected to arrive with a funded budget, not an aspirational one, and the closure chosen this week is the budget it arrives with. Secondary weight on mobility 25, since closure A above will still be visible in the corridor’s mode share at the jury. Also the main fiscal groundwork for the Week 12 capstone, where the corridor is costed as a whole rather than district by district.
Teaching team
- Tobias Wren — tutor