Value Capture and Equity in Infrastructure Development
3 February 2021
One of the ways to finance new infrastructure projects is to capture the extra value that they produce. A rail line makes a suburb far more valuable, particularly the areas around the stations. As it is planned some areas can be sold, or the government can develop the central areas and charge higher rates or a percentage of the increase in value when the land is sold. Simply to buy the land, built the railway and let the developers make all the profit is just plain dumb and is why there are so few rail lines in Western Sydney.
But there seems no sensible plan. The Federal government paid 10 times as much for some non-vital land to a mate, and now seems to be squeezing smaller landholders as they compulsorily acquire the land. If the land is going to be worth a lot more because of the railway, the people who are forced to move should get a bit extra for their trouble. This is only fair.
What is needed is a public formula that gives a fair price when the land is acquired and some value capture for the taxpayer. Railways should be self-financing, with fairness for all.
It seems that the governments are both corrupt and inept. With all the consultants floating around a formula should be proposed, debated, decided and implemented.