Infrastructure Funding
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Issue No. 110 No. 110 Issue March 2017 March new planner the journal of the New South Wales planning profession Infrastructure funding Development Contributions I Social Infrastructure Value Capture I Voluntary Planning Agreements Strategic and Statutory Planning Urban Design and Heritage Retail and Economic Planning Planning Advice Expert Evidence and Court Appeals Development Applications Call DFP Planning on 02 9980 6933 or visit Planning Proposals/Rezonings www.dfpplanning.com.au for more information. White Bay Peninsula Walkway and Ferry Wharf EMM is a leading planning and environmental Residential Apartments at George’s Cove Marina consultancy. The firm is distinguished by consistent high quality work, integrity and commitment to our clients. We provide urban & regional, social and transport services. Goulburn Health Hub Brett McLennan Sydney 02 9493 9500 planning | environment | acoustics | ecology | heritage| groundwater |soils, closure, rehab | gis www.emmconsulting.com.au 2 | MARCH 2017 | newplanner CONTENTS This issue New Planner is the journal of the New South Wales (NSW) planning profession. The Planning Institute of Australia (PIA) publishes New Planner in March, June, September Editorial 4 and December each year. The Journal provides a forum for news, opinion and the exchange of ideas on urban and regional planning in NSW and abroad. President’s message 5 CONTACT From the Minister 7 PIA NSW Suite 404, Level 4, 32 York St, Sydney NSW 2000 Transformation: The role of value capture to transform 8 T: 02 8904 1011 E: nswadmin@planning.org.au New Planner Unlocking School facilities 10 E: newplanner@planning.org.au W: www.planning.org.au/news-archive/new-planner-nsw Local Government 12 CONTRIBUTIONS The Editors welcome contributions to New Planner in the Sydney’s Bennelong Bridge: Pioneering value ‘sharing’ 14 form of articles, opinion pieces, letters, reviews and news items. Please download the contributor guidelines from: Healthy Built Environments 16 www.planning.org.au/news-archive/new-planner-nsw Regional Planning 17 NEW PLANNER EDITORIAL COMMITTEE Managing Editor Value sharing for affordable housing 18 Alice Strömstedt MPIA, Architectus Associate Editors NSW Young Planners 20 Camille Lattouf MPIA, Architectus (Lead Editor, March 2017 issue) Funding affordable rental housing: What are the options? 22 Laura Wynne PIA Student, UTS Shona Porter PIA (Graduate), City of Canterbury-Bankstown A fairer way of delivering local infrastructure in the new Sydney 24 Elle Clouston MPIA, HillPDA Philip Graus MPIA, Cox Richardson Fairness and efficiency in infrastructure funding: A more 26 Benjamin Cohen PIA (Assoc.), Hassell sustainable value capture model Andrew Connor MPIA CPP, Waverley Council Development Contributions, Value Capture and Voluntary 28 SUBSCRIPTIONS Planning Agreements New Planner is only available for PIA members. To become a member contact: nswadmin@planning.org.au or 02 8904 1011 Planning Perspectives 30 COVER IMAGE Render of Sutherland to Cronulla Planner Tech 31 Active Transport Link (Source: Architectus) Snippets 32 The Inbox 33 PIA Voluntary Planning Agreements Position Statement 34 DESIGN Harostan Press International Pty Ltd T: 0409 900 111 E: mfleeting@bigpond.com The views expressed in New Planner are those of the authors Stay up to date with the latest news from and do not necessarily reflect the views of the Planning Institute of Australia. Copyright for each image belongs New Planner. Follow us today! to either the article author(s) or the Planning Institute of Australia unless otherwise noted. @pia_newplanner www.linkedin.com/in/newplanner ISSN 1324-8669 PP a233-867-00015 newplanner | MARCH 2017 | 3 GUEST EDITORIAL Value capture Lifting the shroud Joe Langley MPIA, Technical Director – Infrastructure Delivery, AECOM For value capture disciples like me, our time in search of our Holy Professor Bill Randolph argues that affordable housing is vital economic infrastructure that Grail has been long, tedious and strewn with non-believers. The can be supported by Inclusionary Zoning, a six (not twelve!) true believers I’ve selected for this issue bring a form of value capture that progressive local cross-section of perspectives from academia, government and and global cities are using. the private sector that will help lift the shroud of mystery from Billbergia’s Rick Graf describes how this proven city-shaping infrastructure funding method. smart developers are taking the initiative to prove that well-designed value capture mechanisms can deliver major transport infrastructure while supporting profitable uch of the confusion around the view that the present local government private sector development. idea of value capture in Australia infrastructure funding system in NSW has can be put down to Australia’s been distorted by artificial restrictions At the metropolitan level, City of M natural rejection of conformity. and poorly targeted funding mechanisms. Parramatta General Manager Greg Dyer What other country would change rail gauges Capping of local government rates (since describes the multi-billion community because of an imaginary line on a map? 1977) and Section 94 contributions (since infrastructure tab needed to equip 2010) has forced councils to be “creative Value capture is a funding method that Parramatta for its role as one of three and innovative” in their search for ways identifies and hypothecates some portion dominant urban centres in Global Sydney. to meet their communities’ needs. In this of the value created by public investments, Even with value capture, Greg believes environment, nearly every source of revenue allowing public agencies to recoup a portion Federal and NSW government agencies will has been rebadged as “value capture” in the of their investments from direct and indirect need to consider other metropolitan-wide scramble to meet contemporary expectations beneficiaries in proportion to the benefits funding sources, such as road user charges for facilities and services. Rather than they receive. Potential beneficiaries include broadening value capture, Greg advocates and hypothecating stamp duties where both public agencies and the private sector fixing existing contributions schemes and significant value uplift has occurred. organisations. Importantly, the hypothecated funds should be dedicated to help pay for removing the distortions on funding sources. Professor Ed Blakely tackles the role of specific infrastructure investments that At the Federal and state levels, the elephant value capture in helping to fund mega produce these benefits. in the room is stamp duty. Adrian Dwyer of projects along Australia’s east coast. Professor Blakely proposes a Sydney- Pat Fensham of SGS Economics and Infrastructure Australia points out that stamp duty distorts the housing market, increases Parramatta-Canberra high speed rail link Planning helps us through the maze of funded in part by land value uplift, which value capture definitions by explaining that housing costs, restricts housing supply and would help release pent up demand for there are four different types of funding acts as a deterrent to homeowners who affordable housing, fund railway stations contributions, but only one that is a true wish to downsize. However, I suspect few and enhance job growth from the core of value capture method. The well spring of observers would agree that stamp duty pure value capture is actually drawn from captures value as it is currently applied. Canberra to the heart of Parramatta. increases in land value generated “wholly The benefits of land tax, on the other hand, Value capture funding mechanisms solve independently of any investment by the land are “wide-reaching, with positive impacts funding gaps not fully addressed by current owner or developer”. “It is reasonable”, Pat on housing availability and affordability, contribution schemes. Drawing upon the tells us, “that a share of the uplift in land collective wisdom of our panel of specialists, value be extracted to fund public benefits, transport network efficiency, infrastructure funding sustainability and long-term land- Australian value capture programs should including infrastructure”. Pat’s piece shows be guided by the following key principles; us how the uplift in land value is the result use planning”. Adrian makes the case for the of public sector land use policy changes, not Australian Government to provide incentives • Funds transformation infrastructure extracted from the fingernails of squealing to the states and territories to get on board that exceeds the capacity of traditional property owners and land speculators. with this long overdue reform. funding sources. Properly designed and implemented value The role of value capture • Is based on an agreed infrastructure list. capture mechanisms don’t reduce housing affordability or increase development costs. The problem with current funding • Focuses on precinct-based planning. mechanisms in NSW isn’t that we don’t • Requires private sector participation So what’s wrong with current funding have enough of them, it’s that the ones arrangements? in decision-making, investment and we do have don’t work well. Our authors delivery. There is legitimate concern by both advocates provide compelling cases for using value and opponents that value capture methods capture mechanisms to fund long-term, • Hypothecates funds captured into could result in double taxation of property. transformation infrastructure not already dedicated accounts. Greg New of GLN Planning shares