For purposes of LR, Germany relies on public valuation boards, or land valuation boards. These valuation boards cover specific areas (e.g. Berlin, Hamburg, Munich, Dresden, etc.), comprised 10 to 20 members and number around 1500 across Germany (Kertscher 2004). These members represent expertise from public survey departments and private sector knowledge on real estate and land valuation (Seidel 2006). Land valuation boards are entrusted to collect and maintain purchase price data; publish periodic valuation trend reports; write and provide valuation reports when requested by the public or private sector, or courts; and, generally assess property values and levels of compensation. These boards manage the process of valuation and provide oversight and accountability to the valuation process. This stresses the point made before that LR also requires efforts in terms of building institutions. In this case, institutions that govern land valuation for LR.

The existence of strong institutions allows Germany to use redistribution of land by relative value. Land valuation methods are outlined in the federal law, and include the sales comparison approach, the income, and the cost approach. For LR purposes, and to generally value land, the comparison approach is the most commonly used.

Purchase price data is critical to carrying out market comparison valuation. Germany’s database on purchase prices is a record of the ground value of all land transfers. Details on land plots included in the database are size of lot, type of use, location, date, etc. This information is available to the public for a fee (Seidel 2006). The database has been digitally stored since the 1980s, which allows for more complex computational valuation methods on large quantities of data, such as multiple regression analysis. By the 1990s, valuation committees began to georeferenced these data and linked it to geographical information systems (GIS) (Kertscher 2004). The evolution of the management of price data enables Germany to explore methods to increase transparency and ensure that data can be analyzed in the most accurate way.

Germany’s LR process may also use redistribution by relative size.<sup>15</sup> Redistribution by relative sizes provides a useful instrument when the value of land is hard to determine. By defining the assignment of land after development based on initial size rather than value, the public agency avoids the need for a valuation exercise. This may prove to be of great use in countries where land markets are weak or information on property prices is not available. The challenge in this case may prove to be convincing landowners to accept redistribution by relative size as a reallocation criterion. This may be more useful for projects where plots have very similar characteristics and no dramatic differences in prices are expected across different plots.

While Germany’s LR process serves as a model for successful implementation of urban development processes, some argue that the German case presents challenges in its adoption. Since LR is local authority-led and considered mandatory, it is not seen as truly participatory. Landowners have a right to appeal compensation amounts as well as express their views, but do not play a role in the LR process itself. Larsson also argues that all landowners that fall within the project area must participate in readjustment since there is no way to exempt oneself from the process (Larsson 1997). Further, while it is true that consensus of the majority of landowners is not required in Germany for commencing a LR project, it may be an important

> 15 In this case, the area of each landowner’s property deducted by the municipality shall not exceed 30 percent, or 10 percent in the case of already developed land, and should the municipality need less the full 30 percent, the landowner must pay the municipality the difference in the post-development market value.

11