10 November 2016
(Land Acquisition (Just Terms Compensation) Amendment Bill, 9 November 2016, Legislative Assembly, NSW Parliament)
The Land Acquisition (Just Terms Compensation) Amendment Bill makes some improvements and adds some fairness to the process by which owners and residents are made to sell or move from their homes when the property is needed for government projects.
I acknowledge that building important infrastructure will from time to time require the acquisition of homes and I welcome changes to make the process better.
However I note with concern comments by the minister in the other place during the second reading speech that because 80 per cent of government land acquisitions are achieved through agreement, the vast majority of landowners have agreed on land valuation and compensation during ownership transfers. This has not been my experience with constituents who have been forced to sell their homes or relocate, many of whom came out of the process feeling done over, even when they accepted an offer.
In the Sydney electorate, 7 Elizabeth Street in the central business district was recently acquired for the Sydney Metro Project and before the 2015 boundary changes, the Sydney Electorate included Olivia Gardens in Surry Hills, which was acquired for the light rail project.
I would like to take the house through some of the concerns raised by my constituents going through the acquisition process in these cases.
Seven Elizabeth Street is a beautiful heritage listed building of 54 studio apartments, with a mix of owner-occupiers and tenants. It is the only block of flats in the CBD built during the 1930s that continues to function as a residential building. It has modernist European influences with decorative aspects. The building provides scarce low cost housing in the inner city.
Residents, owners and everyone who cares about Sydney’s aesthetics and architectural history do not support using this building as the site for a metro stop, especially when other options were available.
Of great concern is that the building next door at 9 Elizabeth Street was not chosen even though: it is not heritage listed; it is reported to be occupied only by bicycle spaces and lockers; and it is owned solely by Macquarie Bank. Curiously, Macquarie Bank has submitted an unsolicited proposal for redevelopment of 7 Elizabeth Street after completion of the metro stop. These revelations came after negotiations for acquisition with owners were finalised and some owners are not happy. They are concerned that the reason their homes were earmarked for destruction was to help a private company profit.
The acquisition process should be aimed entirely at achieving public outcomes and not delivering windfalls to big business.
Many owners of 7 Elizabeth Street felt especially cheated that they were not informed about proposals to sell the airspace that their homes occupied after completion of the metro stop. They point out that they were unable to negotiate the true market value of their home as they were unaware of the potential uplift value to their property, which was withheld from them.
This is unfair and the bill should have strengthened obligations on acquiring authorities to divulge all relevant information about potential uplift value, even if final decisions have not been made on the future of a site. The bill should also mandate that market value include uplift value.
During the acquisition of homes in Olivia Gardens in Surry Hills for the CBD and South East Light Rail project, residents made a number of criticisms about negotiations.
The process began badly with Olivia Gardens residents and owners finding out that their homes could be acquired by seeing a map of the light rail route through their complex published in The Sydney Morning Herald.
By the end of negotiations, many owners felt jaded by the process. Some who had accepted their offer felt cheated when they found out that their neighbours got a significantly better deal by refusing offers and having their case determined by the Valuer General.
Some owners were concerned that Transport for NSW took an excessive amount of time to execute an agreement after an owner accepted an offer. They said it took over three weeks to deliver agreements and then once signed and returned, it took a further six weeks to deposit the money. This caused many financial burden with meeting bridging costs including deposits for new homes. The bill does not address this concern.
I was told that owners were required to indemnify Transport for NSW for months after settlement even though they were no longer in possession of the apartment and had no control over matters. This seems unfair and absurd and has not been addressed by the bill.
I strongly welcome changes in the bill to remove the requirement for those whose homes have been acquired to pay rent to the acquiring authority. Olivia Gardens residents who had to stay beyond eight weeks after settlement were required to pay market rent and Transport for NSW withheld an astronomical bond of 10 per cent of the purchase price of their home. Market rent was not appropriate given residents occupied the land under a licence inferior to a residential tenancy lease, and owners were disadvantaged from loss of standard interest from the bond.
Concerns specific of former Olivia Gardens tenants included that tenants were made to vacate before a formal Proposed Acquisition Notice was issued, which left them ineligible for solatium, relocation or rent assistance. Tenants also reported that they were given limited information making negotiations and decisions difficult.
The biggest concern of all owner-occupiers and tenants who have had to lose their home under compulsory acquisition is that they have not been able to find a new home in their community for the same house value or rent. There are few low and medium cost homes in the inner city and if you live in one that is being acquired, the chances of finding another in the same area for the same value are low. This means that owners and tenants may not be worse off in terms of the return for their asset or from having to move their personal effects, but they may be disadvantaged from being forced to leave their community.
The Russell report identified that all other states and territories had legislated for reinstatement and recommended that New South Wales include provisions to compensate for the cost of acquiring a reasonably equivalent home. The government has not adopted this except in the case of limited uses of land that make it difficult to determine market value, such as a church. I ask that the government reconsider.
The extra time and extra money for Solatium costs are welcome, especially given it will be retrospective and therefore help my present and former constituents. But more needs to be done to improve the process.
Being forced to sell your home can be devastating, particularly if it is your principal place of residence and you don’t own other property. Many people buy a home for the long term security. Being forced to move including for renters can be extremely stressful given competitive property markets.
If the government continues to build infrastructure projects, it will need to do more to ensure that people losing their homes are not unfairly disadvantaged. I welcome this bill as a first step in improving the system.