Here's how the São Paulo value capture program works, according to an article by Leão Serva: "City leaders identify a redevelopment zone, and issue a number of bonds to be sold to developers at auction. The bonds entitle the developers to build bigger buildings than the law would normally allow. Revenue from the bond sales are invested back into housing, roads and other infrastructure in the same redevelopment zone."
Especially in areas with high demand for new construction, developers have not been timid in bidding for these bonds. "And the auctions have yielded the city a massive windfall. In 12 years, São Paulo has raised about R$ 4.5 billion, or close to $2 billion in U.S. dollars, through these sales."
"In São Paulo’s case, the action to unlock land value is 'upzoning' an area for more intense development," but Serva also describes other cities or examples where a value capture program can help close the funding gap for badly needed infrastructure investments.
Serva's coverage is one of the rare examples of clear and accessible writing on what could be wonky subject matter. The article also covers some of the criticisms and recommended reforms for the São Paulo program.