Social Function and Value Capture: Do They or Should They Have a Role to Play in Polish Land Development Regulation

Abstract

This article presents a discussion between two U.S. and a Polish author about devices to promote public interests through private land development and regulation. The two U.S. authors document the fact that in many South American and European countries the concepts of social function of property and value capture play a central role in the government regulation of land development - particularly in urban areas. The social function theory of ownership, first popularized by the French jurist Leon Duguit in the early part of the 20th century, recognizes private ownership as subject to social obligations and the need for mutually beneficial use. Value capture is implemented by requiring landowners whose land values are iStudia Iuridicancreased through development permission granted by government regulatory entities to share some of that increased value with the public by funding public infrastructure and paying for developments such as affordable housing. In the U.S., neither term is in common usage although mechanisms such as impact fees and other development charges that require developer funding of infrastructure arguably reflect the influence of comparable concepts. The U.S. authors then posed the question to their Polish collaborator of whether social function theories and value capture are currently being implemented in Poland. The Polish author explains that the current approach to social function theories in Poland is greatly influenced by Poland's experiences under communism, during which state property received special protection as compared to private property. After the fall of communism, this distinction was removed and private property received considerable protection as a pillar of the new economic system. However, he points out that this does not undermine the social aspect of ownership and that private ownership is not absolute and may be subjected to restrictions. In regard to the U.S. approach to value capture through impact fees, the Polish author explains that the Polish "adjacent fee" bears slight similarity to impact fees, but it does not require private landowners to participate in funding the infrastructure needs created by their development. He concludes by observing that while Polish law does not preclude adoption of measures similar to impact fees, at present there is neither political will nor popular support for such arrangements.

Keywords: comparative law, urban development, social function of property, impact fees, adjacent fees, land use, value capture

JEL Classification: K39