Demetrio Muñoz Capturing value increase in urban redevelopment a study of how the economic value increase in urban redevelopment can be used to finance the necessary public infrastructure and other facilities Capturing value increase in urban redevelopment A study of how the economic value increase in urban redevelopment can be used to fi nance the necessary public infrastructure and other facilities Capturing value increase in urban redevelopment A study of how the economic value increase in urban redevelopment can be used to fi nance the necessary public infrastructure and other facilities An Academic essay in Management Sciences Doctoral Thesis to obtain the degree of doctor from Radboud University Nijmegen on the authority of the Rector Magnifi cus prof. dr. S.C.J.J. Kortmann, according to the decision of the council of deans to be defended in public on Monday November 22, 2010 at 13.30 hours by Demetrio Muñoz Gielen Born on May 20, 1970 in Málaga (Spain) Supervisor: Prof. dr. B. Needham Doctoral Thesis Committee: Prof. dr. ir. G.R.W. de Kam Prof. dr. J. Roca (Politecnic University of Catalonia, Barcelona) Prof. dr. M. Oxley (De Montfort University, Leicester) A word of thanks is given here to the OTB Research Institute for the Built Environ- ment (Delft University of Technology), which invested much in making possible this Doctoral Thesis. Also, thanks are due for fi nancial assistance given by the Dutch government (Habiforum Program Innovative Land Use), and by the Delft Centre for Sustainable Urban Areas (Delft University of Technology). Het verhalen van waardestijging in stedelijke herstructurering Een studie over de manier waarop de economische waardestijging in stedelijke herstructurering gebruikt kan worden om de benodigde openbare infrastructuur en faciliteiten te betalen Een wetenschappelijke proeve op het gebied van de Managementwetenschappen Proefschrift ter verkrijging van de graad van doctor aan de Radboud Universiteit Nijmegen op gezag van de rector magnifi cus prof. mr. S.C.J.J. Kortmann, volgens besluit van het college van decanen in het openbaar te verdedigen op maandag 22 november 2010, om 13.30 uur precies door Demetrio Muñoz Gielen geboren op 20 mei 1970 te Málaga, Spanje Promotor: Prof. dr. B. Needham Manuscriptcommissie: Prof. dr. ir. G.R.W. de Kam Prof. dr. J. Roca (Politechnische Universiteit van Catalonia, Barcelona) Prof. dr. M. Oxley (De Montfort Universiteit, Leicester) Dankwoord: het Onderzoeksinstituut OTB (Technische Universiteit Delft) wordt bedankt voor de materiele en menselijke inzet die dit proefschrift mogelijk hebben gemaakt. Tevens worden de Nederlandse overheid (Habiforum-programma Ver- nieuwend Ruimtegebruik) en het Delft Centre for Sustainable Urban Areas (Tech- nische Universiteit Delft) bedankt voor hun fi nanciële steun. © 2010 D. Muñoz Gielen Published by Sidestone Press, Leiden www.sidestone.com Sidestone registration number: SSP56890001 ISBN 978-90-8890-059-4 Pictures: Demetrio Muñoz Gielen and Carles Gascó Design: Corien Smit, Amsterdam Illustrations: Felipe Fernández Córdoba, The Hague Cover illustration: Tim Martin, Dreamstime.com Cover design: Karsten Wentink, Sidestone Press There are not enough words to thank to those that helped me to give birth to this re- search. This book is dedicated to my family, to all those that wisely advised me, and to those that had the patience to listen. It is dedicated also to Felipe Fernández Córdoba, Joost Zonneveld, Carles Gascó and Miles Roston for having me helped to ‘make’ this book. I thank Javier García-Bellido († 2006) for all his inspiration and friendship. No hay palabras sufi cientes para agradecer a aquellos que me han ayudado a dar a luz a esta investigación. Este libro está dedicado a mi familia, a todos aquellos que me dieron sabios consejos, y a aquellos que tuvieron la paciencia de escucharme. Está dedicado tam- bién a Felipe Fernández Córdoba, Joost Zonneveld, Carles Gascó y Miles Roston por haberme ayudado a ´hacer´ este libro. A Javier García-Bellido († 2006) le agradezco toda su inspiración y amistad. TTable of Contents Chapter 1: Introduction: problems in the fi nancing of public goals in urban regeneration in the Netherlands .............................................................1 1.1 Recent history in Dutch land & housing policies: towards more private involvement ................................................................................ 2 1.2 Problems with fi nancing public goals in urban regeneration ................... 5 1.3 Could legally binding land use rules help to improve the fi nancing of public goals? ...................................................................................... 6 1.4 Legitimacy of capturing value increase ................................................... 7 1.5 Formulation of the problem .................................................................... 9 1.6 Research Questions ..............................................................................11 1.7 The structure of this report .................................................................... 12 1.8 The practical value of this research ....................................................... 13 Chapter 2: Theoretical framework: capturing value increase within policy networks ...............................................................................................15 2.1 Power and the role of public bodies in policy networks ........................ 16 2.1.1 The Policy network approach to power relationships .............. 17 2.1.2 How to intervene in policy networks: Network management .. 23 2.2 The formal rules governing property rights in land ................................ 24 2.2.1 Restrictions on the exercise of property rights in land ............. 24 2.2.2 The nationalization of development rights in England and Wales ............................................................................... 26 2.2.3 The Netherlands: the debate about splitting development rights from land ownership ..................................................... 27 2.2.4 The separation of infrastructure provision from property rights in the Spanish region of Valencia ...................................30 xii Table of contents 2.3 Binding rules which infl uence certainty and fl exibility in planning ....... 34 2.3.1 Plan-led versus development-led planning systems ................. 35 2.3.2 The arguments for and against certainty and fl exibility in planning ................................................................................. 38 2.3.3 Some fi nancial aspects of certainty in planning ....................... 40 2.4 Model of the causal relationship between formal rules relevant to zoning and capturing value increase in urban regeneration .................. 41 2.4.1 The activities and the actors in urban regeneration ................. 42 2.4.2 Causalities of the amount of value increase fi nally captured ... 44 2.4.3 Financial analysis of the cases ................................................ 54 2.5 The hypotheses .................................................................................... 59 2.5.1 The fi rst network constitution measure: modifying the contents of property rights ...................................................... 59 2.5.2 The second network constitution measure: modifying the level of certainty about future development terms ............. 60 Chapter 3: Method ..............................................................................................63 3.1 Why case research? .............................................................................. 64 3.1.1 Multiple case design ............................................................... 65 3.1.2 Interviews ...............................................................................66 3.1.3 Moment of data gathering .......................................................66 3.2 The validity of the fi ndings ....................................................................67 3.2.1 Internal validity ....................................................................... 67 3.2.2 External validity ......................................................................72 3.3 Answering the Research Questions ....................................................... 76 3.3.1 Answering Preparatory Research Question 1 ........................... 79 3.3.2 Answering Preparatory Research Question 2 ........................... 82 3.3.3 Answering Preparatory Research Question 3 ........................... 83 3.3.4 Answering the Main Research Question.................................. 85 Chapter 4: Quick scan: formal rules relevant to zoning in Western European countries ...............................................................................87 4.1 Zoning regulations in the negotiation processes ....................................88 4.1.1 Are zoning regulations (binding and not-binding) approved in early stages of development processes? ............................... 88 4.1.2 Approval of detailed binding rules at the development moment .................................................................................. 89 4.1.3 Conclusions regarding the place of binding rules in the negotiation process: Plan-led versus Development-led ........... 90 4.2 Contents of binding rules ......................................................................92 4.2.1 Zoning plans vs. implementation-oriented plans, both binding ........................................................................... 92 4.2.2 Limited vs. broad contents