b'MUDD 24 URBAN NETWORKS|URBAN GATEWAYSlarge site, investing in public facilities and high- Effective and ineffective value capturequality public space will raise the sale priceExample 1: The Ward Street Precinct masterWill be able to deliver the proposed of all land parcels. Enlightened outlays mayplan community facilities and public open space increase the degree of value capture and thethrough a variety of mechanisms including profitability of the project. When governmentsland sales, planning agreements and value demand such qualities and facilities throughcapture (Hassell 2018, p 100).planning instruments, they are often reinforcing what is already in the developers interest. It turns out, however, that in this case value capture is achieved by granting a participating A similar form of value capture operatedland owner a large increase in development when railways and tram services were privatepotential in return for a proportion of the investments. The investor first bought landresulting increase in land value, referred to along the route, then built the infrastructure toas the uplift, being contributed by the owner make the land attractive, and invariably madetowards the costs of the public components. their biggest (or only) returns from land, notThe consultants illustrate the proposal in the from operating a transport service. To facilitatefollowing manner.this process as railroads were built across the US by the robber barons, g overnments enabled land to be compulsorily taken by theFigure 2: Pedestrain flows in North Sydney investor, who thereby owned the increase in(Source: Mecone 2018, p.24)land value due to the railroad.In Figure 2, below, Ward Street is the cul de Public investments in infrastructure and othersac at the top of the map, between Miller urban improvements have used these kinds ofStreet and Walker Street. Its only significance mechanisms only intermittently, until recentlyis that the council owns two sites at the end of relying on central tax revenues for funding.Ward Street. The sites are used for multi-storey For most people owning urban land, payingcar parks, operated by a tenant, whose lease taxes is largely a lottery. There is seldom aends in 2020.direct connection between taxes paid andFigure 3 (left) & Figure 4 (right): Value components. benefits derived. Taxes are consolidatedThe Council could use these two sites to(Redrawn from Hassell 2018, p100)into a single fund and spent according to abenefit the city centre in many ways, by governments priorities (of course influencedselling them to acquire land (or propertyIn Figure 3, the blue bar is the market value by their constituencies). Typically, the positiverights) in a better location, for instance, or byof the building, or the completed project. With externalities from these investments will betransferring the development entitlements togood luck and good management, there is an distributed unevenly, with some taxpayersa more valuable location. Instead the Councilamount of profit, after all the usual outlays. The funding windfall gains for others. appears to have decided to leverage this landdifference between the two bars is the land exactly where it is, even though the blockvalue, as shown in Figure 4. Its called residual, In the provision of infrastructure, valueis somewhat peripheral to the centre of thebecause (in this approach) it is the amount capture is a mechanism to recover some ofcity, as clearly shown by the pedestrian flowsthat remains when the other amounts are 19 these windfall gains, by attempting to match(Figure 2). The block has thus been given aaccounted for.increases in land values on the one hand, andhigher significance, reflected in an optimistic some kind of impost on the other. description as a precinct. It is also c alled uponThe consultants then consider the amount of to be the vehicle to transform the city centre,uplift that will be needed to fund the public Suddenly it is a term that the NSW Governmentthrough the implementation of a master plancomponents of the Ward Street precinct master and North Sydney Council have embraced.to deliver a public space of about 500 m2 andplan.Unfortunately, the kind of value capture theya branch of the city library. The consultants on refer to is a minimal version of the real thing.the project advise that the Council:This will become clear from an examination of the current proposals and policies of the North Sydney Council and Sydney Metro.MUDD 24 - Urban Gateways | Urban NetworksINTRO 8pt.indd 20 26/11/2019 4:11:26 PM'