Distribution of Costs and Profits in Urban Development

Most countries have a system - procedures and tools - for foreseeable, clear and fair
distribution of costs and profits in urban development.

However, the distribution of profits and costs between the municipality and the developers
/landowners is in Denmark rather fragmented and not very transparent as the distribution is
regulated throughout the whole planning and environmental regulation system. Furthermore,
development agreements – an “old” tool in many countries and an efficient tool to distribute
profits and costs between the public and private sector – have only recently become possible
in Denmark, and only under some special circumstances.

This paper aims to clarify how costs and profits are distributed between the municipality and
the developers /landowners in Denmark.

The paper analyses how the Danish planning and environmental regulation system handles
this issue. Based on the analysis an overview will be constructed. Finally, the paper discusses
the Danish “distribution model”, and who holds the best ”set of cards” in the distribution of
profits and costs in the urban development process.