Guided land development uses the provision of infrastructure as a mechanism to guide urban development. It is done in partnership with landowners who pay for the cost of servicing their land through donation of land for public infrastructure and payment of a betterment levy
Guided land subdivision while being quite enticing on paper is often fraught with difficulties on the ground.
- As the scheme depends on the consent of the landowners it cannot be applied in areas with fragmented landownership. Too many landowners mean that greater time and effort is needed in building consensus. It is very likely that those landowners who have access to roads will refuse to participate voluntarily. Landowners may want to continue the rural use of land.
- Collection of betterment levies, particularly on an annual basis may not be acceptable to landowners. Or even if it is acceptable, they may for various reasons, default on the payments. The option of holding a land parcel as collateral against default of payment may not be feasible. Judicial proceedings in civil cases in most developing countries take several years to complete. This would mean that the particular parcel of land will be out of the market until the civil case is settled. Moreover, it may be politically undesirable to repossess lands of small landowners who are most likely to default.
The only advantage that guided land development has over land pooling/land readjustment is that the government does not need to decide on the amount of land to be returned to the landowners at the end of the project.