About possible application of VOP
in a ReUrbA project: the Stedenbaan
Interview with Damo Holt, author of the ReUrbA VOP report

'The idea behind Value-Oriented Planning (VOP) is strong: investors contribute to public facilities in an area, either immediately or in the future.' Damo Holt was directly involved in the drafting of the ReUrbA report on VOP.
VOP is far from being the first approach that springs to mind in all urban regeneration projects, and so we took a look with him at an example of where it could be used. We picked on the Dutch Stedenbaan project, in which ReUrbA was also involved.
'This project involves considerable investments in the infrastructure of the busiest and most densely populated part of the Netherlands, the Randstad urban agglomeration. It is a plan for a fine-meshed train network in combination with new residential and working locations close to the stations. Property developers will benefit a lot from these plans. Without government investment, the infrastructure would not be improved so radically and the locations in question would lose much of their potential value. This causal relationship between the investments and the potential value of the surrounding property is crucial for the possible application of VOP.

But the approach is relatively new to the Netherlands. In recent years, the Netherlands has started to acquire experience with public-private approaches. The benefits for the government have not always been clear. So the approach now to VOP, and to all other new forms of collaboration with private parties, is more circumspect. Until recently, the Dutch planning system was not appropriate for VOP. This contrasts with, for example, the United States, where VOP is already widely used and accepted. Current Dutch government policy (that was launched in the 'Spatial Policy Document') now allows governments to learn how to use VOP better.'

There has also been an experiment in England with VOP for the extension of the City & Jubilee Line in the London Underground. But that was not a great success and it will not be a source of inspiration for the Netherlands.
'No, but that was a result of the collapse of the property market. Other projects in the United Kingdom, Ireland and France were not great successes either. The Ørestadbanen in Denmark is possibly the main positive exception. During the ReUrbA VOP project, we found that the Netherlands and England had gone further in terms of the acceptance of VOP than, for example, the German ReUrbA partner.'

Is the Dutch Stedenbaan project appropriate for VOP?
'I think so. A number of Stedenbaan locations have clear VOP potential. The Maasterras (Dordrecht - Zwijndrecht) and Binckhorst (The Hague) projects, for instance. The ReUrbA VOP project organised a number of workshops for these two locations in order to explore the possibilities of VOP and to determine what the government authorities wanted. As a result, it was possible to formulate a clear objective for the consultations with private parties about value capturing and the extent to which it will be used. But VOP in the Netherlands is still in the early stages. It has to be said that value capturing, the essential component of VOP, has only really been used in the Sijtwende project in Haaglanden.'

What stands out in the descriptions of VOP is that the approach has mainly been successful in the USA and Canada. Does VOP fit in with the European culture and, for example, the Dutch tax system?
'Perhaps it's a mistake to look at American and Canadian examples of VOP. There are major differences between America and Europe in the planning cultures and the tax systems. But turning to the Netherlands, I still don't think that the differences mean that the VOP approach can't succeed here. Inspiration can also be found in France (Marne la Vallée near Paris) or Spain (Poble Nou in Barcelona, or Valencian development planning in general). Government culture on the European continent is of course closer to practices in the Netherlands. An awareness is now gradually emerging in the Netherlands among public and private parties that a number of investments should not be made by society alone but that private parties who benefit from public investments should also bear some of the burden.
But when you turn specifically to tax instruments, you find out that the various players in the Netherlands still have a long way to go. In the Netherlands, it is central government that deals with most tax schemes. It is difficult for regional and local authorities to reduce taxes over which they have no say.'

What does the application of VOP require from government, private investors and ordinary citizens?
It is important for government authorities to determine early on in the process what return they want to see from VOP. They must do this before they start negotiations with private investors. The first condition is that public investment must generate genuine added value for private investors and that this added value would not be generated without the public investment. In addition, there must be a realistic return so that private investors are kept on board. Private investors must understand that they have a direct interest in the public investment and that shortages in project financing – that may result in the failure of the project – will have to be covered in part by themselves if they are to make a successful investment at all.'

It is possible to imagine that the public at large will also make financial contributions as part of VOP. 'Yes. In Ireland, contributions to public transport links are even regulated by law. For example, when a new station or railway line is built, private parties with a direct interest are required to contribute. This could be an option in the Netherlands, but a lot can also be achieved on a voluntary basis. Dutch land-use legislation will soon provide governments with the option of recovering costs from developers. It is of course unreasonable for the government to pay the costs without sharing in the profits that result. An interesting new factor is that, with the land-use legislation as an incentive, the Dutch government will soon be able to exert pressure on private parties to enter into agreements voluntarily.'

>>> REURBA REPORT ON VOP
>>> MORE ABOUT VOP