How land is used affects a wide range of outcomes – from day-to-day quality of life, such as the length of commutes, to the environmental sustainability of urban and rural communities, including the possibility for climate change adaptation and mitigation. Moreover, the economic importance of land is immense. Land and the buildings on it are approximately seven times as valuable as all other assets taken together and land-use policies play a crucial role in determining land and property prices. Beyond economic value, land also has important sentimental value. Many people are strongly attached to existing neighbourhoods and landscapes in their vicinity. Thus, it is not surprising that land use is often contested and political conflicts about it are common at the local level.

Land use matters for many of the most important policy questions of our time: environmental sustainability, CO2 emissions and biodiversity, and public health, for example. Land and buildings constitute by far the most important share of wealth in the OECD, making up 86% of total capital stock (roughly evenly split between land and property), with a corresponding value of USD 249 trillion. Thus, any changes to the value of land and property have important consequences for the distribution of wealth and for investment. Land use also matters because people care strongly about how land is used, as the often intense and emotional debates around it show.

Land use affects the environment, public health, economic growth, the distribution of wealth, social outcomes and the attractiveness of cities and towns. Land-use practices have major consequences for climate change mitigation. Land use has been linked to approximately one-third of all man-made CO2 emissions. Land use also influences air pollution and determines whether or not cities are walkable. In turn, both factors affect public health.

This introductory chapter highlights the importance of how land is used to both individual and collective well-being. It discusses the economic characteristics of land followed by the governance of land use and its consequences for a wide range of economic, social and environmental outcomes. The chapter ends with an outline of the structure of the overall report.

This chapter provides an overview of the major themes and debates that have shaped how spatial and land-use planning is practiced and governed. It explores the purpose of planning, including its intentions in shaping both present and future land uses and outcomes. Next, it discusses evidence of shifting modes of governance, whereby an increasingly diverse array of actors is involved in spatial planning. It further describes how the scale at which planning is conducted has shifted in many countries towards a larger metropolitan frame and the importance of such governance across functional urban areas. Following this, the importance of flexible and integrated approaches to spatial and land-use planning is discussed. The chapter ends with a discussion of the need to consider policies that affect land use but that are outside of the purview of the planning system in order to effectively meet spatial objectives such as social equity, environmental sustainability and economic development.

This chapter explores the connections between fiscal frameworks, tools and incentives and land use. The first section examines how fiscal frameworks – namely reliance by local governments on own source revenues versus state transfers – influence local governments to pursue either expansionary land-use policies, or not. It also explores the connection between how local governments are financed and their incentives to collaborate with one another or to compete. The second section examines the fiscal incentives that impact on the land-use decisions of individuals and businesses. The third section examines how fiscal tools can be used to manage development by highlighting key practices. Finally, the need to better align fiscal incentives with spatial planning objectives is discussed.

This chapter provides an overview of major trends and developments related to actual land use in Europe, Japan and the United States. It is based on statistical analyses of land cover data for the three geographical areas covering approximately the time period 2000-12. It highlights that developed land makes up only a small part of the total land mass of all analysed countries. The area of developed land has been growing in all countries, but often the growth rate of developed land has been below the population growth rate, implying that land use on a per capita basis has become more sparing. More compact patterns of development are associated with positive outcomes along several dimensions. In particular, they are correlated with higher rates of economic growth and lower levels of air pollution

This chapter provides examples from practice – drawing on case studies on the governance of land use in six cities across the OECD. It examines spatial and land-use planning around three key themes which organise the chapter: i) compact development, ii) meeting housing demand, and iii) increasing well-being and quality of life.