TRANSIT AND URBAN RENEWAL VALUE CREATION Hedonic Price Modelling Assessment of Sydney’s Key Transit and Transit-Oriented Urban Renewal Investments (2000–2014) SUPPORTED BY: TRANSIT AND URBAN RENEWAL VALUE CREATION REPORT | i REPORT REVIEW STATUS Revision Date issued Reviewed by Approved by Date approved Revision type REPORT DISTRIBUTION Revision Quantity Issued to REPORT MANAGEMENT Last saved: 23/05/2016 12:43 PM Author(s): Dr James McIntosh and Dr Roman Trubka Client: Transport for NSW Client Project Number: Name of Project: Transit and Urban Renewal Value Creation Document version: Draft LUTI Consulting Project number: LUTI-15-04 The content and concepts and information contained within this document is and shall remain the property of LUTI Consulting. The document may only be used for the purposes for which it was commissioned and in accordance with the Terms of Engagement for the commission. Unauthorised use or distribution of this document in any form is prohibited. Authorised by: ____________________________ Date: 23 May, 2016 ii | TRANSIT AND URBAN RENEWAL VALUE CREATION REPORT TABLE OF CONTENTS List of Figures iv List of Tables viii List of Equations xi i Acknowledgements xiv ii Glossary xvi iii Synopsis xix 01 Introduction 1 02 Background 6 03 Methodology 24 04 Sydney Metropolitan-Wide Hedonic Price Models 33 05 Sydney Subregional Hedonic Price Models 53 06 Discussion of Results 99 The Team 105 TRANSIT AND URBAN RENEWAL VALUE CREATION REPORT | iii LIST OF FIGURES iv | TRANSIT AND URBAN RENEWAL VALUE CREATION REPORT LIST OF FIGURES Figure 1 – Phases in the Transportation Infrastructure Investment-induced Land Market Value-Creation Process ...............xv Figure 2 – Heavy Rail Catchment Panel Data Hedonic Price Model Results for the Metro. Region for the Period 2000– 2014 ........................................................................................................................................................................................ xvi Figure 3 – Heavy Rail Catchment Panel Data Hedonic Price Model Results for the New Macquarie Park Stations (2000– 2014) .........................................................................................................................................................................................................xviii Figure 4 – Sydney Metropolitan Strategy 2014: ‘A Plan for Growing Sydney’ ..................................................................................... 2 Figure 5 – Global Sydney Journey-to-Work Mode shares in Sydney .................................................................................................. 3 Figure 6 – Metropolitan Sydney’s Mass Transit Pedestrian Walking Catchments............................................................................ 4 Figure 7 – Cyclical Relationship between Land Market Activity and Transportation Accessibility (and the Relevant Transportation and Land Use Policy Frameworks and Modelling Tools) ..........................................................................................10 Figure 8 – The Financial Value ‘Virtuous Cycle’ Resulting from the Investment in Urban Regeneration and Transportation Infrastructure ............................................................................................................................................................................................11 Figure 9 – Phases of the Transportation Infrastructure Investment-induced Land Market Value-creation Process ..............13 Figure 10 – Land Market Bid-Rent Curve (Land Bid-Rent = Total Revenue – Cost of non-land inputs) .....................................14 Figure 11 – Theoretical Land Market Value Creation Curve of the Monetisation of Accessibility from the Investment in Transit Infrastructure ............................................................................................................................................................................................16 Figure 12 – NSW Mass Valuation Approach .........................................................................................................................................19 Figure 13 – Dulwich Hill Extension to the Inner West LRT Catchment: Average Assessed Land Values & Catchment Sales Values .........................................................................................................................................................................................................22 Figure 14 – Dulwich Hill Extension to the Inner West LRT Catchment: Median Assessed Land Values & Catchment Sales Values..........................................................................................................................................................................................................22 Figure 15 – Epping to Chatswood Rail Line Catchment: Average Assessed Land Values and Catchment Sales Values .........23 Figure 16 – Epping to Chatswood Rail Line Catchment: Median Assessed Land Values and Catchment Sales Values ..........23 Figure 17 – Hedonic Price Modelling Workflow Utilised for this Project ..........................................................................................28 Figure 18 – Metropolitan Sydney Transit Catchment Map .................................................................................................................36 TRANSIT AND URBAN RENEWAL VALUE CREATION REPORT | v LIST OF FIGURES Figure 19 – Hedonic Price for Each of the Suburbs within the Metropolitan Model (compared to the Suburb of Sydney) ......39 Figure 20 – Sydney’s Heavy Rail Network ..............................................................................................................................................42 Figure 21 – Metropolitan Region Panel Data Hedonic Price Model Results for Heavy Rail Catchments (2000–2014) ............43 Figure 22 – Sydney’s Ferry Network .......................................................................................................................................................45 Figure 23 – Metropolitan Region Panel Data Hedonic Price Model Results for the Sydney Ferry Catchments (2000–2014) .45 Figure 24 – Metropolitan Region Panel Data Hedonic Price Model Results for Sydney Main Roads Catchment Hedonic Price (2000–14) ...................................................................................................................................................................................................46 Figure 25 – Metropolitan Region Panel Data Hedonic Price Model Results for Distance to Coast & Centres Elasticities ......48 Figure 26 – Metropolitan Region Panel Data Hedonic Price Model Results for Sydney Core Land Use Zones (2000–2014) (Compared to Residential) .......................................................................................................................................................................49 Figure 27 – Subregion Map of the Hedonic Price Modelling Catchments for the New Stations of the Epping to Chatswood Rail Line ..............................................................................................................................................................................................................56 Figure 28 – Epping to Chatswood Rail Line’s Pedestrian Catchment Land Use Zoning Map for All Stations along the Alignment ..................................................................................................................................................................................................56 Figure 29 – New Macquarie Park Stations Only – Residential, Business and Mixed Use Land Uses Only – Heavy Rail Panel Data Hedonic Price Model Results (2000–2014) .................................................................................................................................61 Figure 30 – Sydney’s Light Rail Network ................................................................................................................................................63 Figure 31 – Dulwich Hill Extension to the Inner West LRT Subregion Map ......................................................................................64 Figure 32 – Inner West LRT Land Use Zoning Map ..............................................................................................................................64 Figure 33 – Dulwich Hill Extension to the Inner West LRT Subregion – Residential, Business and Mixed Use Land Uses Only – LRT Panel Data Hedonic Price Model Results (2000–2014) ...............................................................................................................69 Figure 34 – Dulwich Hill Extension to the Inner West LRT Subregion – Land Use Panel Data Hedonic Price Model Results (2000–2014) (Compared to Residential Land Use) ..............................................................................................................................70 Figure 35 – Sydney’s Bus Rpaid Transit Network .................................................................................................................................72 Figure 36 – Parramatta to Liverpool T-Way Subregion Map ...............................................................................................................73 vi | TRANSIT AND URBAN RENEWAL VALUE CREATION REPORT LIST OF FIGURES Figure 37 – Parramatta to Liverpool T-Way Land Use Zoning Map ...................................................................................................73