Planning & Financial Resources African cities: Intro. to Urban Planning Cities have financing needs. They have infrastructure and facilities needs. They need to pay for the infrastructure and finance this infrastructure, but they rarely have the means to do so. Earlier we saw the possible mechanisms between loans and taxation, and we'll see more specifically which may be the levers, particularly when it comes to real estate, which allow for an increase in local revenues. It is possible to look for them elsewhere, but there are also local possibilities to increase some of these revenues, and we'll see that this is directly linked, directly connected, to the urban plan. The problems are numerous, because the available resources do not meet the need, but one of the main problems today lies in decentralization. Now decentralization itself is not a problem. We've delegated a certain number of powers from the central government to local organizations, but we've delegated these powers and these responsibilities to these organizations without necessarily budgeting for them. So we find ourselves in a situation where the local organizations have more work to do without having more money budgeted to accomplish it. That is the heart of the problem, that we are in a situations where municipalities are in dire need of means with which they might accomplish all that they are tasked with. Revenue sources are two-fold. There are property taxes and activity taxes. For this, as we'll see, the property clearly needs an address or a cadastre in order to collect these taxes. But we have within this plan taxes on property and activity. There are three challenges. The informal, how I can capture part of this informal activity. The question of property, and the question of economic activity. These are the challenges to secure resources for a local government, is to work on these three possible levers. The question of informality is relatively simple. How do we handle an activity that is by definition informal? How can we succeed in capturing part of its resources? Because it does have resources, because the economic activity, while poorly paid, is paid. So we can come up with mechanisms to capture a small portion of this activity. To do this we can, for example, impose a tax on street vendors. Now these street vendors are accounted for and must pay, each day, each week, a tax to the municipality. These are relatively low taxes, the costs to collect them is significant in relation to the low taxation, but in the whole scheme of informal activity this reaches amounts which can be significant. It requires a systematic approach so that this revenue source becomes a real source of revenue. When it costs more to collect the taxes than those collected, we must ask ourselves if it is not a problem in the system. But even with the informal, there is no problem when it comes to collecting taxes, we must just know how and on which types of activities. When it comes to transportation, it's the same thing. We can collect taxes on private buses, which are by definition informal, at least organized in a totally informal way. Real estate value. I'll return to our city plan, with the city center, here. There are two types of real estate values. For this entire urban extension here I can tax the price of my parcel, I can collect tax upon its purchase but also an annual tax. This tax must then be applied to the costs of roadways, electricity. I'm oversimplifying, but this is exactly what it's about. We take it once, at the time of the transaction, or annually. Here too, the more roadways I build, the more I densify key zones, the more my value will increase, and thus the land value will increase, and the greater the appreciation on my real estate. We can imagine a mechanism which would allow us to capture this appreciation, at least partially, and this will then allow for the financing of our infrastructure. The case study, my subway route, which we saw in Rabat, in a previous video, allows for the creation of a real estate appreciation. We must find the mechanisms which allow us, in the case of the sale or rent of an apartment, to capture part of this appreciation, which will in return pay for the infrastructure which I put in place to create this appreciation. Thus it's a cycle, a virtuous cycle, the only problem being that as soon as we say we'll capture this appreciation, there is a whole series of possible circumventions which will allow us to keep these official values, and then to leave the informal to avoid paying, or being able to pay these taxes. But we must keep in mind that, in the case of our urban plan, of our urban planning, whether in the outskirts or in the center, all the infrastructure that I plan is directly interconnected with local finances. This is to say that there is an enormous influence of my urban plan, of my master plan, and of the way in which I plan on these local finances. Urban planning has an enormous influence on infrastructure costs. We've seen this in housing developments, but there is also an influence on the appreciation which one may or may not create. So we must play both sides when planning, on the one hand to limit investment costs, and at the same time allow for an appreciation on these investments so that we can, in turn, tax them. In sum, there is an economic activity, we can be taxed. The more it prospers, the more taxes we'll collect, which is to say that the city plan, the master plan, should enable us to provide a certain amount of land, or through its infrastructure, the necessary conditions for the development of economic activity. It is always these sweeping ideas, this wishful thinking, the infrastructures needed for the development of an economic activity. But this is what it's about. At the same time, it is about land offers, and about offering accessibility to them. Accessibility, not only to the land, not only to the city. If I apply a global view, the fact that, for example, When some countries allow easy entry without a visa, and as such allow the stream in and out of people, this allows for the development of activity. If while seeking to develop this activity you are subject to constraints significant enough that you are no longer interested in its development, then finally you will go and develop somewhere else. There are some who are captive, because they are in the city, and won't leave it to go to another city to develop their activity,
