Transport infrastructure costs could be recoverable


Governments are well placed to recover transport investment costs from the home-owners and business people who benefit financially from new infrastructure, according to research from the University of Sydney.

Professor Corinne Mulley says the practice of taking contributions in line with an increase, or uplift, in property values and profits flowing from new infrastructure already occurs in parts of the United States, has been tried in Queensland, and is now under consideration in NSW.

“Value uplift refers to the way in which when you put in new infrastructure, typically transport infrastructure, the land around that infrastructure becomes more accessible, it allows you to get to more destinations more quickly, and so the price of that land goes up,” Professor Mulley explained.

Professor Mulley’s research examined the degree of “uplift” related to infrastructure development in Britain and Australia, including bus rapid transit and heavy rail in Brisbane.

“On the Gold Coast, which has a new light rail system, residences have paid a small amount of extra tax in order to help fund it and I don’t see that that’s unreasonable,” said Professor Mulley, who holds the Chair in Transport at the University’s Institute of Transport and Logistics Studies.

“The NSW Government is referring to the concept as value-sharing, and I understand that it is going to put a limited process in place to help cover the cost of the Parramatta light rail system,” Professor Mulley said.

Citing the example of London’s Jubilee Underground line, which pushed up adjoining individual property values by more than $1 million when it opened, she said that, “it has always seemed to be quite wrong that individuals should benefit when the thing which produced that benefit is paid for by the public purse.”

Professor Mulley says that, ideally, governments should levy home owners and businesses as the infrastructure is being built.

“Transport infrastructure is really expensive, and governments are finding it difficult to provide the sort of infrastructure we need to produce the sustainable cities that we want for the future” Professor Mulley said.

However, she also acknowledges the political difficulties associated with such a contribution system, and says that it may be better to levy a charge when a house is eventually sold.

“Businesses are less of a problem, because new businesses and the entrepreneurs who build them, will take account of land value uplift when making investment decision.”

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