Urban Land as a Financial Resource: Lessons from Land Value Capture in Ahmedabad (India)

Cities are increasingly turning to private investment to fund public infrastructure by treating urban land as a financial resource through Land Value Capture (LVC) tools. In India, LVC has gained attention in recent years, with national and state planning frameworks encouraging cities to use land-based financing methods to support infrastructure development and urban growth. Although LVC is often seen as an innovative solution to funding challenges, its growing use raises important questions about economic resilience, governance, and the long-term sustainability of urban resource management.

This paper uses Ahmedabad as a case study to examine the Sale of Development Rights (SDR), an LVC tool included in the city’s Development Plan, and explores how urban land is turned into funds for public infrastructure financing. By examining legal guidelines and municipal budget data, it tracks the increasing role of SDR in city revenues and evaluates its impact on urban financial stability and planning goals.

This study shows that relying more on SDR can expose cities to financial risks associated with real estate market cycles and wider economic trends. This reliance may limit municipal independence and affect development choices as funding for infrastructure becomes closely linked to private market forces. By turning development rights into financial assets, LVC tools change how urban land is governed as a public resource, impacting fairness, spatial planning, and equitable access to urban infrastructure.

This paper concludes that while LVC can effectively add to municipal revenues, excessive dependence on private investment carries significant financial risks. It contributes to debates on how cities can balance growth-oriented financing mechanisms with economic stability and equitable resource management.