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The concept of non-financial compensation: what is it, which forms can be distinguished and what can it mean in spatial terms?


by Marjolein Spaans | Menno van der Veen | Leonie Janssen-Jansen

Non-financial compensation increasingly receives attention in both planning practice and science across the world. Non-financial compensation exists when a government compensates a person or company with an interest in land for the loss of one or more of his property rights therein by creating a new property right that he can either use or sell. It also exists when a government provides an incentive for developers to realise certain planning goals either on their land or on the land of others and the government does not directly subsidise that realisation but creates a property right that they can use or sell when they have realised the goals. We distinguish between single-purpose and multi-purpose types of non-financial compensation. A single-purpose type of non-financial compensation exists when the non-financial compensation-scheme is not a planning tool in itself but only exists as a way to compensate the landowner for his loss. It relates to the compensation of a loss of right and could be considered as a passive instrument as it is only used to compensate. A multi-purpose type of non-financial compensation exists when the scheme not only compensates the landowners, but is also used as a tool to reach a certain spatial planning development goal. This type of scheme relates to an opportunity to develop something additional and implies an actively deployed scheme.
The paper elaborates on why government has to and wants to compensate and why government can recapture added value in spatial planning cases.