CLARA will use a private based value capture model to provide the required resources from the value uplift of the land to fund the related infrastructure including the High Speed Rail.
Whilst detailed financials are commercial in confidence and therefore not published here, the below information from a submission written for Goodman, to the NSW Parliamentary Inquiry into Capturing the Value of Transport Infrastructure details how the process works.
“Obviously as a revenue raising device, value capture has been in existence for a considerable period of time.
However, the creation of value capture models to support the funding of infrastructure projects has become more sophisticated over recent times. As economies become more complex and the funding gaps for infrastructure cause unintended consequences for both the economy broadly and the form and shape of our Cities, investigating better methods of raising funds has come into sharp focus.
There is universal recognition across government and industry that well-planned investments in transport infrastructure increase surrounding property values and tax revenues. Research shows that these increases are greatest when transport investment is teamed with integrated land use – transport planning.
Integrated land use – transport planning links transport and land development investment decisions, increases accessibility to transit, reduces private vehicle travel, makes better use of infrastructure and urban land, and ultimately improves the quality of life of residents and workers
(Transport Infrastructure Council 2003).
It involves a number of factors:
Value capture programs contribute to public infrastructure decision making by promoting ‘smart growth’ principles. “Smart growth means managing urban development patterns and transportation networks to minimise environmental impacts and maximise the social and economic health to the community while making prudent use of capital and operating expenditures” (McIntosh et al 2014).
The infrastructure tasks for cities like Sydney and Melbourne is made more difficult due to past planning policies that promoted urban sprawl. As a consequence, the population density in Sydney is approximately 350 people per square kilometre over a 12,000 square kilometre basin. Connecting the parts of Sydney together is a significant challenge unless density around existing infrastructure nodes becomes an accepted normalised planning outcome.
By way of example, London, Paris, and New York all have population densities in excess of 6,000 people per square kilometre. Not unsurprisingly, all those cities have extensive public transport networks and approximately 80% of residents rely on public transport for daily travel. As cities they have adopted planning policies that make reliance on public transport convenient, by creating liveable, walkable, cycle-able mixed use precincts. Our city planners need to embrace a less homogenous and prescriptive planning framework which create “activity silos” which in turn creates reliance on cars to move between regions for work, play or leisure. By creating well planned, mixed-use precincts and intensifying the use of existing infrastructure and new infrastructure a more effective and ambitious planning outcome can be achieved.”
Value capture is the use of proceeds from the uplift in value of land that comes from transport and other infrastructure being built nearby. Value Capture allows for part of the land value uplift to partly or wholly fund physical and social infrastructure. It is known in many forms of taxes, charges, duties, levies and private contributions.