Council eyes 'you gain, you pay' rates rise

Roger Blakeley. Photo / Dean Purcell

Homeowners whose properties benefit from nearby big transport projects could face higher rates or levies under new plans by the Auckland Council.

Chief planning officer Roger Blakeley says targeted rates or infrastructure levies are among several ideas being considered for paying for such projects under the proposed Auckland Plan.

Rising property values in expectation of benefits from the projects could become a basis for raising loans to pay for them.

The proposal is part of a paper by the Council for Infrastructure Development, which has been submitted to Mayor Len Brown.

Other ideas include road "network pricing", which Dr Blakeley says would offer a double hit of reducing traffic congestion while generating revenue for transport projects.

His comments follow what economics consultancy Motu Research says may be a modest estimate of a $605 million boost to residential land values in the former Waitakere City after the now-completed western railway line upgrade was announced in 2005.

Dr Arthur Grimes and Chris Young analysed more than 16,000 sales of Waitakere City homes between 1993 and 2009 to assess the impact on land values created by the mere anticipation of benefits from the upgrade.

These represented 22.8 per cent of total residential sales.

The pair compared sales before and after the upgrade was announced, to estimate the effects on land values near upgraded stations on the western line, on which track duplication work was completed last year.

Measuring the sales against those of properties 8km or more from any stations, where the effects were assumed to have declined to zero, they calculated a $605 million boost to residential land values within their catchments. The figure rose to $667 million after adding assumed increases to commercial and industrial land values. That was "of the same order" as an estimated cost of $620 million for the Waitakere-related portion of the rail upgrade - including a $300 million bill for the New Lynn trench and associated urban regeneration to be shared by the Government, ratepayers and developers.

But the economists said it was possible their measure would prove conservative in not having fully captured all long-term and wider geographical benefits.

Dr Blakeley said "increment-targeted" rates were used overseas to raise loans for projects like the inner-city rail tunnel, recognising they would boost the capital value of properties and attract new investment.

Council for Infrastructure Development chief executive Stephen Selwood said the proposed Auckland Plan gave Aucklanders a strategic choice in the face of empty Government coffers to cover a $9 million shortfall for important new transport projects.

The plan is due to be formulated by the end of this year.

But the chairman of the New Lynn-based Whau Local Board, Derek Battersby, feared targeted rates would put builders off in-fill housing developments around railway stations and undermine substantial investments of public money.

THE NUMBERS

$605m Estimated boost to residential land values within 8km of West Auckland railway stations.
$667m Estimated boost when adding commercial and industrial properties.
$620m Cost of West Auckland rail developments.