Housing charges to fund bulk infrastructure: innovative or traditional?

Abstract

This study investigates whether the use of housing charges is an innovative or traditional instrument in financing bulk infrastructure. It develops a conceptual framework to demonstrate how housing charges are perceived as an innovative model of financing and funding bulk infrastructure. Research focuses on a case study policy pilot infrastructure project in New Zealand, with primary evidence gathered from informed professional stakeholder interviews. The findings highlight that revenue streams are the most common concern when applying the infrastructure funding and financing (IFF) model to deal with bulk infrastructure. Further, as housing charges are a new instrument generating cash flows to finance bulk infrastructure, it is found that financing infrastructure development is only innovative in terms of its mechanics, legislation and policy setting.

Deciphering Property Development around High-Speed Railway Stations through Land Value Capture: Case Studies in Shenzhen and Hong Kong

“…LVC characterizes a certain aggregation of alternative financing methods by capturing a portion of land value increment that is attributed to the benefits of public interventions [8,10,15]. There are two prerequisites for the use of LVC: (1) there is an uplift in land value from public investment; (2) there are favorable public policies facilitating the capturing of increased land value [9]. It is notable that capturing methods have been diversified to account for all sorts of social, economic, and political circumstances all over the world [16].…”

“…Overall, LVC has spread from well-established markets, where tax-based mechanisms are used, to some flourishing markets, where land-centered financing practices are popular for mobilizing different resources to fund large-scale public infrastructure [1,16]. As Mathur [10] points out, to enhance the cooperation among stakeholders in LVC, inclusive value creation should be enabled to properly share the increased land value among public agencies, transit agencies, private real estate developers, and residential communities [18].…”

“…Improving the provision of public infrastructure is key to achieving sustainable development goals (SDGs) within the global context of increasing inequity and ecological deterioration [1]. For the next decades, it is predicted that the proportion of public infrastructure expenditures in the aggregate economy will continue to rise, accounting for 3.5% of annual GDP worldwide [2].…”

“…Recognizing all these knowledge deficiencies, this study thus developed the following research questions: (1) Can LVC strategies be used to fund HSR projects? If yes, what are the operational models?…”