Ley 388 required every Colombian municipality to prepare and adopt a ten-year Plan de Ordenamiento Territorial (POT) setting out urban perimeters, expansion areas, land-use regimes and public-space standards. It gave municipalities a toolkit of implementation instruments including planes parciales for coordinated development of large sites, land readjustment, transfer of development rights, betterment levies and expropriation for social purposes. Its most influential provision, participacion en plusvalias, allows a municipality to capture between 30 and 50 per cent of the increase in land value created by public decisions such as reclassifying rural land as urban, changing use, or granting extra floor area. Revenue must be spent on infrastructure, public space and social housing in underserved neighbourhoods, and the law also anchored the constitutional principle that property carries a social and ecological function.
Ley 388 is the most exported piece of Latin American planning legislation, giving the region a legally robust answer to the question of who owns the value created by planning permission and directly informing Brazil's City Statute of 2001. It underpinned the Bogota and Medellin transformations of the 2000s, financing bus rapid transit, libraries, public space and social housing from captured land value rather than general taxation.
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