Lunchtime Seminar: Value Creation

About the Speaker:  Dr James McIntosh has 20 years of professional experience in multidisciplinary engineering and environmental consultancies in Australia and Internationally with SKM and pitt&sherry and for his own planning and economics firms, McIntosh Consulting and LUTI Consulting.  James is an experienced Land Use Planner, Transport Planner/Economist and Registered Cadastral Surveyor, and has a PhD in developing a “Comprehensive assessment framework for valuing transport infrastructure projects”. James is also a qualified and experienced expert review panel chair for Gateway Reviews for government in NSW, Victoria, Western Australia and Queensland.

Abstract : LUTI Consulting and Mecone Planning (with support from the NSW Government and the CRCSI) have jointly conducted an integrated land use and transport Hedonic Price Modelling assessment of Sydney’s key transit and transit-oriented urban renewal investments over the period 2000 to 2014.  The study analyses the land value uplift associated with access to transit infrastructure, a change in land use zoning, and a change in allowable development density. The study then presents an argument for integrating transit and urban redevelopment projects to optimise the land market capacity created from infrastructure investments.   

The results from the study highlight the following:

• The value created from the investment in public transit varies by mode, with the average heavy rail public transport accessibility benefit across the Sydney Metropolitan Region is 4.5%, with an uplift of up to 50% in some subregions analysed. The value uplift for other transit modes whilst generally positive, varied with respect to its permanency, whilst the average effect of being within 100 metres of a main road is minus 7.6% due to the impact of noise and other transport externalities.
• In terms of land use planning zones, the Sydney CBD zoning has the highest proportional benefit, followed by the Mixed Use zone and Residential zoned land, with Business and Industrial zoned land valued below Residential. Therefore, significant value can be created for projects if land catchments surrounding new infrastructure are rezoned to their highest and best use for the specific mode and corridor.
• The increase in development density benefit across the metropolitan region is explained by the Floor Space Ratio (FSR), where every 1:1 increase in FSR equates to a marginal 23.9% increase in land value. The change in FSR across a corridor to take advantage of an increase in accessibility can induce a significant uplift in land value as developers, new residents, and businesses seek to locate themselves near the transit infrastructure.

The value creation study is the biggest land market willingness to pay analysis ever undertaken for Australia’s largest city, and builds on years of experience in other cities like Perth, West Australia. For the first time the public and private sectors have an evidence base demonstrating how Sydney’s urban land markets have valued Government’s investment in transport infrastructure and decisions around land use and Floor Space Ratio (FSR) allocations, and from this evidence base economic and financial models can be prepared for potential future integrated land use and transport projects.

The Report can be downloaded from: http://www.luticonsulting.com.au/wp-content/uploads/2013/12/Sydney-Transit-and-Urban-Renewal-Value-Creation-Report.pdf