While Colombia’s betterment levies have been lauded as a successful example of this method of land financing, the process does face a number of challenges. Betterment levies were less successful in the 1980s and 1990s because of rising land costs, making it difficult to determine compensation values (Peterson 2008 and Uribe 2009). Among the weaknesses of this method are the fact that there is no quantitative standardized method to measure the benefits from infrastructure improvements; and the lack of a uniform method for assigning the benefits and therefore the levy paid by each unit. After this decline, the process was simplified and instead of making parcel-by-parcel estimates of land-value gains due to individual investment projects, the city created a bundle of public works projects linking it to a citywide valorización fee that is broadly differentiated by benefit zone as well as other factors. The approach has allowed Bogotá to revive valorización as an effective device for financing infrastructure.

Citizen participation in the betterment levy process has also contributed to its more recent success. The primary mode of public engagement is through citizen overseers. Enabled through the Citizen Overseers Act of 2003, citizens are empowered to monitor, research, and participate in public administration activities (Borrero et al. 2011). Citizens may also initiate a betterment project if 55 percent or more of the citizens in the coverage area consent. This effort is appropriate for smaller projects, and was employed for the _Obra por Tu Lugar_ program. Borrero et al. (2011) find that although _Obra por Tu Lugar_ is positively received, communities face difficulties financing projects. The various avenues for community participation promote greater acceptability of betterment levies in Colombia.

Uribe (2009) points to three internal challenge areas for betterment levies in Bogotá. First are institutional limitations. At present, betterment levies are managed by _Instituto de Desarrollo Urban_ (IDU), and their unilateral management is perceived as “non transparent”. Further, until recently the property tax valuation performed by the Cadastre was not consistent with IDU determined benefit from a betterment project. With recent updates to the cadastral database, it is possible now for IDU to use the same property values that are recorded in the Cadastral. Efforts are currently being done in this line, so that all data collection efforts are centralized in the Cadastre, and other institutions can benefit from these efforts. Second, betterment levies have the potential for producing regressive effects. In general, the majority of betterment projects end up occurring in more affluent areas of the city because of their high capacity to pay; some projects (e.g. highway overpasses) may decrease property values. Finally, interadministrative coordination is deficient in many cases. Even though IDU works with the Planning Department on betterment project planning, the projects are not always internally consistent with the city’s Master Plan.

# _Betterment Levies in Peru_

The experience in Peru provides a counterpoint to Colombia’s betterment levy process. Betterment projects in Peru are concentrated in metropolitan Lima and are empowered by Legislative Decree No. 184 of 1981. While betterment levies have become a widely used form of revenue collection in Colombia, they have yet to gain traction in Peru, which illustrates unique implementation challenges to metropolitan Lima. From 1990-3, more than 500 public works projects were undertaken in Lima, but only 31 projects used betterment levy financing (Huayapa 2001: 4). To determine the benefit of projects, local authorities choose among two methods, or a combination of them.

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