Value Capture or Infrastructure Charges

Value Capture or Infrastructure Charges ? A Tale of two Brisbane transport infrastructure projects. Bruce James Cities Research Institute Griffith University 1

Presentation Outline •

Context – –

•

Land Use Transport Integration – –

•

Infrastructure Charges Value Sharing (Capture)

Policy Initiative Framework – – –

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Brisbane Cross River Rail Brisbane Metro

Capacity Public Value Community Support

Value capture prospects ? ATRF 2018

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Brisbane Cross River Rail Project objective: Tunnel Above ground Existing network New station Existing station Busway connects

Bowen Hills

• Improve capacity of SEQ suburban rail network

Project components: • Rail tunnel under the Brisbane CBD • Three new underground stations

CBD

Cost: $5.4 billion

Proponent: Dutton Park

• Cross River Rail Delivery Authority (Queensland State Government) ATRF 2018

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Brisbane Metro BCRR

$

Project objective: • Improve efficiency of busway network

Project components: • Bus based “light rail” into Brisbane Busway (60 vehicles capacity 150 passengers) • Remove bottleneck at Cultural Centre station Cost: $900 million

Proponent: • Brisbane Transport (Brisbane City Council) ATRF 2018

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Infrastructure Charges • Different terminology – Infrastructure Charges - Queensland – Developer Contributions – Victoria, WA – Impact Charges - USA

• Purpose – New land use development “contributes” to cost of new or upgrades to existing infrastructure – Charges derived from infrastructure costs ATRF 2018

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Value Capture / Sharing • Different terminology – Value Uplift / capture / sharing – Betterment taxes / levy – Tax increment finance – Special area rates

• Purpose – Charges derived from value of land / property – Sharing of property value increases due to extrinsic benefits of public infrastructure ATRF 2018

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Policy initiative framework

Community support

Capacity

Public value Source: Professor Hermann ‘Dutch’ Leonard

ATRF 2018

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Community support

Capacity

Capacity Public value

Institutional arrangements: Local Gov’t

Charge arrangements Land use planning

State Gov’t

Development control Infrastructure charges Special area rates

Property value rates/charges

Betterment levy Stamp duty

Extensive application Very limited application Powers but no application ATRF 2018

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Community support

Capacity

Public Value Public value

Will new public infrastructure increase nearby property values ? Findings: 1. Literature mixed on establishing causal relationship. 2. Timing of projects – speculation post announcement to project opening likely greatest increase. 3. Accessibility benefits differ between residential and commercial 4. Studies tend to focus on suburban railways

Answer:

Maybe ATRF 2018

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Community Support Building community and stakeholder support Positives: 1. Easier with commercial in CBD’s. • Parking costs, traffic congestion & high public transport mode share • High rise developments

Negatives: 1. Lack of causal connection 2. Field day for project antagonists ATRF 2018

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Policy Risk Assessment Institutional arrangements 1. Powers and systems: • Different levels of government • Different agencies / disciplines

Revenue stream 1. Highly unreliable if contingent on increases in property values

Beneficiary identification 1. Very difficult to: • Identify specific beneficiaries • Quantify extent of property value increase and share

ATRF 2018

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Value Share Prospects Brisbane Cross River Rail: • • • •

New railway alignment with new stations. Improved access from CBD regional catchment. State gov’t can create value share powers. Opted to totally fund project via traditional capital funds.

Brisbane Metro: • Project aim improved efficiency of existing busways. • Brisbane City Council has value share power and systems. • Infrastructure Australia major funder. ATRF 2018

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