Greenwood is a semi-rural town located within the local government area of Woodburn and has a
population of 6500. The town is approximately 60 kilometres, (70 minute drive) to the central
business hub where employment and services are located. Greenwood has an urban catchment
comprising 2200 single dwelling houses, a main street retail strip of 45 shops, a junior department
store and one the major food retailer. The surrounds comprise 300 farms of varying sizes and levels
of production.
Over the past 5 years the population of Greenwood has consistently expanded which has put
pressure on the demand and cost of housing. Several developers have undertaken feasibility studies
which confirm demand for 3000 new dwellings comprising single dwelling houses of varying sizes
that will accommodate an additional 9,000 residents in the town over the next 3-5 years. The cost of
providing water, sewer and power to a potential development sites has been accounted for within
the various developer’s feasibilities studies, as a well as contributions to Woodburn Council for
additional amenities generated from the proposed development.
In addition to services and contributions to local government, the state government has recently
decided that developers within Woodburn and the surrounding local government areas should pay
an additional levy to contribute towards larger scale infrastructure. In the case of the proposed
development in Greenwood, this state levy would be dedicated to the upgrade of the freight railway
line which passes through Greenwood. There is currently no railway station at Greenwood and as
part of the infrastructure project the state government would fund a railway station, the upgrade of
the railway line and the development of a carpark adjoin the proposed station.
You estimate that a railway station and access to the business hub 60 kilometres away will increase
the value of residential land by between 15 to 20 percent once complete. It is not anticipated that
business use land would increase at all.
Facts
Cost of the railway project including the carpark is $75m and will take 3 years to complete.
Greenwood, Woodburn and surrounding local government residents would also benefit
from the proposed rail link.
The average residential land value in Woodburn and its surrounds prior to the
announcement of a proposed rail link is $275,000, with an average lot size of 750 m
.
The average business land value in Woodburn and its surrounds prior to the announcement
of a proposed rail link is $250,000, with an average lot size of 200 m
2
.
The average rate notice for residential property is $580 p.a. which includes rubbish
collection and local water supply.
The average rate notice for business use property is $1250 p.a. which excludes rubbish
collection and water supply.
The rates for a typical farm are $700 p.a.
Rates are assessed on land value as determined by the Valuer-General in NSW.
You may make assumptions as needed and these should be spelt out at the beginning of your
proposal.
2
Task
Your company has been identified as one of the preferred developers for its contribution in
embracing sustainability in various forms within your projects. The state and local government are
keen for the proposed land release to proceed at Greenwood and for the rail project to supplement
this development and the surrounding suburbs and local government areas. Government are also
aware that an over burdensome levy would adversely impact the decision to subdivide and develop
land needed in Greenwood. Government suspects that simply adopting the following funding option
would be unacceptable:
$75m (Rail project cost) / 3000 new lots = $25,000 levy per lot
As part of the consultation process government are seeking your input into how this infrastructure
might best be funded, of which you would be expected to make some contribution towards. It is
recommended that you consider and reference examples either locally or abroad where such valuecapture
schemes operate with examples showing how infrastructure has been funded using these
approaches.
Marking Criteria Marks
Flow, layout and referencing 5
Defining the emerging problem of infrastructure funding in Sydney 5
Identify and review value capture schemes and options for funding infrastructure 20
(Local and Abroad)
Developing and applying a solution to the Greenwood case with sound rationale 20
Maximum total marks 50