MEDIA RELEASE - October 22, 2015
With unprecedented development slated for the Parramatta Road corridor, the NSW Government has committed to a value-capture mechanism to ensure the windfall benefits are shared by the wider community, not simply private interests.
Value-capture can be simply defined as the private sector contributing to the costs of public infrastructure. The concept is also referred to as value sharing. Local councils have long been funding community infrastructure through developer payment by way of Section 94 contributions and voluntary planning agreements but it is often inadequate to meet the needs of the community.
“I am encouraged that in response to my direct question in Parliament, Planning Minister Rob Stokes acknowledged more needs to be done as existing contribution systems, such as Section 94 and voluntary planning agreements, are insufficient for the required infrastructure and services following infill development,” said Jamie Parker MP, Member for Balmain and Greens spokesperson on urban growth.
“While we disagree on many of the areas and amount of density promoted by UrbanGrowth NSW, it is critical that any windfall profits delivered by rezoning are not captured purely by private interests.
“The Government is determined to drive rezoning to promote infill development, therefore it is essential that development profits are shared by the community. Too often the private developer walks off with a windfall profit following a rezoning process which delivers increased land values and densities.
“The community is left short-changed and outraged at the obscene profits generated by a simple stroke of the pen. Both existing and new residents are then burdened with overwhelmed services and facilities like schools, hospitals and sporting fields.
“For a value-capture system to be successful, it needs to not only capture value during the rezoning process but win early support from developers, the community and local government. Early engagement with all stakeholders on a transparent and evidence-based model will be critical to success.
“The Parramatta Road corridor will generate around $28 billion worth of development over the next 20 years. This marks the project as truly city-shaping, transforming how people move around each day and capable of capturing public support for special funding arrangements.
“The details of the type of value capture mechanism will be critical to ensuring a fair and robust system. I raised the importance of incorporating a value-capture system at the Minister’s recent Parramatta Road roundtable forum of local MPs and mayors. It is encouraging that Minister Stokes has given such a clear commitment and I intend to hold him and the Government to account,” said Mr Parker.
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