Land is a city’s most valuable resource, but is liable to be badly misused. As cities grow, land risks becoming occupied without coordination or supporting infrastructure, while a few lucky landowners enjoy rising values created by the entire city. Active policy can change this.

Urban policymakers face decision on land policy that will dramatically shape the future of cities. This brief examines how decisions over land tenure, planning, and taxation affect urban development.

Land use policy determines whether a city becomes an engine or an obstacle for national economic growth. Smart land use creates a platform on which firms and workers cluster together and individuals access basic services. Clustering makes workers much more productive: workers can specialise in a particular skill and form part of a larger-scale production process. But without active land policy, productive clusters are unable to form; instead land becomes occupied through an unplanned process of urban sprawl.