As urbanization drives up land prices in Africa, city governments are seeking ways to capture this value for public benefit, instead of that of property owners. Hong Kong’s model, where land is leased rather than sold, provides a template that these governments should look to emulate. The model generates significant revenue through public auctions and ground rents, which the government then uses to fund infrastructure and social services. However, replicating this system in Africa poses challenges due to differing historical contexts, land tenure systems, and market conditions. To overcome these challenges, governments must enable transparent land administration and a robust real estate market. They must also be wary of the volatility of land revenue, which makes it unsuitable for financing recurring expenditures. Given that high land prices lead to higher property prices and rental costs, governments should consider supporting policies to ensure citizens are not priced out of the market.
SOURCE: THE CONVERSATION
Hong Kong’s Land-lease System Blueprint for African Cities to Capture Land Value
