Value Creation Potential of SE LRT Kingsford Station - Case Study Example

VALUE CREATION POTENTIAL OF SE LRT KINGSFORD STATION Student’s Name Course Professor’s Name University City (State) Date VALUE CREATION POTENTIAL OF SE LRT KINGSFORD STATION Introduction For the past two decades, there has been significant increase in development of new light rail in cities around the world. In Sydney, there are so many light rail systems that serve different regions of the city. Development of transit corridors such as light rail systems are often government initiatives to spur growth of different regions and to make them livable too. Areas served and of potential of new light rail development are appraised based on factors such as land use, population, transit safety and income levels. SE LRT Kingsford Station precinct consists of areas within and around the Kingsford Station. The area is approximately 180 hectares of land that covers the suburbs of Eastern suburbs of Sydney and is located approximately seven kilometers on the south eastern side of the central business district of Sydney. Previously, the Kingsford Station area was a residential land use precinct and is to be transformed into a mixed land use precinct. The transformation was to come from several government projects of which a new light rail was among them. The SE LRT Kingsford Station new light rail was mooted to spur growth and improve accessibility around the Kingsford region. This development would affect the potential of land markets within the Kingsford Station precinct in different ways. Value creation potential of land markets are in form of land use, change in zoning and monetization value of land. This paper will analyze and estimate the value creation potential of the new light rail system at the SE LRT Kingsford Station (Yedla, 2015). Figure 1: SE LRT Kingsford Station precinct land area Analysis of the SE LRT Kingsford Station precinct land markets for redevelopment potential The SE LRT Kingsford Station precinct land will experience the lowest monetized level in terms of accessibility. This will make the areas around Kingsford station have higher level of monetization from accessibility because their levels of accessibility will have increased more than that of the Kingsford Station precinct land whose level of accessibility will have same or slightly higher accessibility (Szylvian, 2015). The redevelopment potential of the SE LRT Kingsford Station precinct land markets will experience significant uplift in value in areas within the Kingsford Station than areas around the Kingsford Station. This is as a result of the willingness to pay that comes about by living close to the rail station. The overall effect of this will be an increase in land prices and demand in areas within and closer to the rail station. From the fact that the SE LRT Kingsford Station already existed and the new light rail is to be built to improve the existing ones, the accessibility monetization will be experienced before the commencement of operations of the new light rail. The drivers of this are the expectation of interested individuals who would been using the old rail system while anticipating for the completion of the new light rail system. The additional value of the Kingsford Station precinct land will be experienced when the new light rail system is complete (Hartwick, 2015). The redevelopment potential will be create value on all the sub-regions around the SE LRT Kingsford Station precinct land. The highest benefit will be felt in the sub-regions closest to the new light rail as the land in these areas will experience increased demand for mixed used property. However the other sub-regions will have varying levels of benefits depending on the mixed use development and residential density that they will attract. The government anticipation to add a new transport corridor in form of a new light rail system is aimed at redistribution of growth whether new or already existing. The redevelopment potential of Kingsford Station land market will allow further growth in the area. The growth will increase demand for density development of the land. The growth will also unlock development capacity of land market because of investment in different and new mode of transport (Hart, 2015). Redevelopment scenarios for the SE LRT Kingsford station precinct to capitalize on the land market benefits created All over the world, the areas with adequate level of transit infrastructure experience high demand for increase in the density of development. The redevelopment scenario for this effect on SE LRT Kingsford station precinct will be a demand for an increase in the Floor Space Ratio (FSR). However there will be a variability in the increase in the Floor Space Ratio across the different regions within the Kingsford Station precinct land. Another redevelopment scenario for the SE LRT Kingsford Station precinct to capitalize on the land market benefits is the change in zone of the area. This rezoning scenario will bring about the rezoning benefits. Most of the regions will change in zone to highest and best use zoning. The zoning in form of mixed used zoned land in some of the sub-regions of the Kingsford Station may lead to dampening of demand depending on the context of the local and the supporting mode of transport (Fischel & Fischel, 2015). Accessibility benefit scenario of the SE LRT Kingsford Station precinct is felt through the accessibility monetization benefit of the land. The inner regions of the Kingsford Station land will get a lot of accessibility benefit generated from the new light rail transport. The accessibility benefit not only occurs after the completion and commencement of the new light rail but also during the construction phase of the new light rail. The land market generate accessibility benefit scenario through monetization in values of land and transport accessibility benefit (Luque, 2015). Land use scenario is generated from the land values, land prices and land development. The higher densities land use within the Kingsford Station precinct will result in significant benefits. The residential zone within the Kingsford Station is the highest valued land use. The uplift percentage of the land value will be significant as the new light rail project nears the completion and commencement phase. The peak uplift percentage will be experienced throughout the operation of the new light rail (Duranton, Henderson & Strange, 2015). Potential value that the new light rail development could create The new light rail development will have environmental and sustainable development effects. The development of the SE LRT Kingsford Station framework has several initiatives that can progress sustainable development effects within the Kingsford area. However, there are high possibilities that the planning scheme of the light rail will have sustainable development effects as a standard part of Kingsford’s codes and zones. If the zone code are consistent with the planning scheme of the development, the use of code on local provisions will relate with sustainable design provision that will not interfere with the Building Code of the municipality. The council is also advised to study the alternate options of developing and implementing sustainable design outcomes throughout the city. Some of the options are negotiations and discussions with the applicants before the applications are lodged, which will help in coming up with a sustainable design manual and research incentives that will help in achieving sustainable design standards. The development of the new light rail will result in the area’s resident having affordable housing. The new build form typologies makes it possible for the project or framework to encourage affordable housing that allows new types of building that can accommodate many houses but at an affordable price. The building typologies also make it possible for the buildings to have greater density and lower height that translates into the availability of more affordable housing facilities. An important thing to note is that the building typologies of the project makes it possible to have different diversity buildings that are likely to result to higher density buildings. A great mix of density building forms is likely to result in the corridor having unit price points that is likely to result in the corridor giving affordable housing stock (Cheshire, Nathan & Overman, 2015). Additionally, the initiatives if affordable housing builds on expected planning scheme provides the affordable housing providers to take part in the development of the new light rail. The Council has several non-planning scheme measures that allow it to support the development of affordable housing facilities in the area. The Council is recommended to be proactive in investigating and researching on the options that can help in implementing and developing the scheme affordable housing in the corridor, particularly with private sector involvement options. One of these option is facilitating the provision of supported accommodation and homelessness options, which can be done through support and guidance. Another option is raising of community awareness about the issues that affect local housing and facilitating facilities, and the benefits of having providers of affordable housing in the region (Kresl & Ietri, 2015). The development of the new light rail will also result in the increase in the accessibility of the areas around the Kingsford station. This makes the existing area to be monetized to its best use than the current state. The potential created with this is often felt by the government in terms of tax revenues and land owners in terms of rent and increased value of the land. However in the Kingsford case, the potential value will also come about in form of time, ease of movement and price of houses. Generally, the rail system will unlock the undeveloped areas of Kingsford and increase the willingness to pay for properties in those areas when they have been developed and perceived as prime areas. This shows that increase in accessibility because of the new rail system increases the area’s status (Bandarin, Oers & Bandarin, 2015). The business opportunity will also increase in the area due to improved economic activities by availability of new constructed business premises and new business operations to cater for the people who will use the light rail system. Productivity of the businesses will increase because the employees of the businesses will be able to reach their workplaces on time and with less stress. Customers will also have the convenience and timely accessibility to the business centers and social amenities where they get goods and services. The new light rail system will make Kingsford and its surrounding to be more environmentally friendly. The rail system has the potential value to the environment by conserving it. The rail system will reduced reliance on motor vehicle and as a result reduce consumption of fuel that would have been used by the vehicles. When people prefer to use the rail system, there will be low number of vehicle used. The low number of vehicle that will be in use will therefore cause a reduction of pollution and emissions which would have harm the environment (Arvanitidis, 2015). REFERENCES Arvanitidis, P. A. (2015). The economics of urban property markets: an institutional economics analysis. New York: Routledge, Taylor & Francis Group. Bandarin, F., Oers, R. V., & Bandarin, F. (2015). Reconnecting the city: the historic urban landscape approach and the future of urban heritage. Chichester, UK, John Wiley & Sons Inc. Cheshire, P. C., Nathan, M., & Overman, H. G. (2015). Urban economics and urban policy: challenging conventional policy wisdom / Paul C. Cheshire, Max Nathan, Henry G. Overman. Cheltenham, UK: Edward Elgar Publishing. Duranton, G., Henderson, J. V., & Strange, W. C. (2015). Handbook of regional and urban economics. Amsterdam: North Holland. Fischel, W. A., & Fischel, W. A. 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