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Betterment Overview

Betterment is the term used to describe the increase in land value due to planning decisions. When land is rezoned from, say, rural to residential, it immediately becomes more valuable. Under the existing system, the increase in value is pocketed by the landowner. The extra value is actually created by the community: the planning authority makes the decision to rezone the land on behalf of the community, so the additional value created should be collected by the community.

Betterment occurs whenever a planning decision increases the value of the land, such as when planning approval is given to a block of land, or when a block is approved for subdivision. It is the approval, the ‘tick’ given on behalf of the community, that creates the extra value. The increased value of the land properly belongs to the community, and is an ‘unearned increment’ to the landholder/developer. This is not anti-development in any way. The applicant is usually a developer, and their proper return is the profit from the development.

For those wanting a more considered view of Betterment, I attach a paper (PDF Document) by a lawyer and friend, David Spain.




 
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