Wednesday, February 25, 2004

Cross City tunnel to increase land values“Historically we’ve seen a spike in property values in suburbs serviced by the Eastern Distributor, the M4 and the M5, so there is no reason why the inner-city suburbs will not gain similar benefits from the cross-city tunnel,” Woodbury said. When the 2.1-kilometre long cross-city tunnel is operating by the second half of 2005 it will take 90,000 vehicles a day from the streets of Kings Cross and Woolloomooloo.

"As well as easing congestion and reducing noise and pollution, William Street will receive a $20-million facelift in an effort to turn it into Sydney’s Champs-Elysees. One lane in each direction will be closed, enabling the footpaths to be widened and paved in granite. Trees will be planted along both sides and street furniture, lighting and banners added, transforming it into the grand boulevard it was always intended to be. Real Estate principal Peter Shield predicts values in suburbs that will benefit most from the tunnel and the William Street beautification program could jump by as much as 18% to 25%."

The fact that infrastructure development causes increases in land values is well established. And this points to a reasonable source of funding for infrastructure: land value rating. The government should conceive of infrastructure as a self-funding public investment.

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