Which of the following is a land-value capture mechanism?

• A. Transfer some land value increment to fund public improvements.
• B. Tax existing property at higher rates regardless of value change.
• C. Subsidize private landowners.
• D. Increase land speculation.

Answer: (A)

Land-value capture is a financing approach that collects part of the increase in land value caused by public actions or planning decisions and uses those funds to pay for the improvements themselves. The statement that transfers a portion of the land value increment to fund public improvements exemplifies this idea, capturing the windfall created by public investments to help finance them. This differs from regular property taxes that tax existing value regardless of any public change, subsidies that simply subsidize private owners, or strategies that encourage holding out for higher prices and thus increase speculation. A concrete example is applying a charge on benefiting properties to help cover the cost of a new transit line.