The Andrews Government infrastructure jewel – the removal of level crossings – is already creating positives. 

Local agents say the removals, which will set the rail line below road level, will increase the desirability of properties in the immediate area and have a positive flow-on effect for the suburb.

… Frank Ruffo, director at Hodges Bentleigh, said he expected property prices in those pockets to increase up to 15 per cent.

For May, 2015, the median priced home in Bentleigh is $1,055,000 according to

With the savings in travel times and general amenity to deliver a quoted 15% uplift, that equates to a windfall of $158,250 per home.

All four level crossings will be removed for a total cost of $524 million – $131 million per crossing. Of interest is that 3 of these infrastructure developments fall in the marginal seat of Bentleigh. The Liberal MP Elizabeth Miller narrowly lost the seat by 0.9% at the last election.

Will this $393 million spend on the one suburb retain the seat at the next election for Andrews? To add to the infrastructure mix in the marginal seat, the planned Southland Station, is set to cost $21m.

That takes the total infrastructure spend to over $400m in one suburb whilst those in St Albans sit patiently, perhaps again wondering about the power of marginal seats.

We are awaiting further detail on the value capture process adopted for such level crossings. The Andrews government pre-election policy was to adopt a ‘no losers’ value capture system. “Give homeowners the $158K but lets retain a little of the upkick from new commercial and residential land built on the reclaimed land created by the new level crossing.”

If we were to take the best case scenario, value capture could be applied to all homes in the seat of Bentleigh. If we take the number of  40,301 electors in the seat and assume a conservative 20,000 homes, they would pay an average $1,035 per annum back to the government to repay the $414 million (3 x $131m + $21m) over 20 years. That’s $20,700 over 20 years in return for a $158K windfall. It could be seen quite simply as a thank you for the time savings delivered. That meagre amount would fall further to $690 p.a if we were to assume one third of electors lived in single unit abodes. Of note is that these are median payments based on the land values of one’s property, probably repaid via municipal rates based on land values (similar to Perth’s Metropolitan Improvement Levy). Those living closer would pay marginally more than those further away from the level crossing removal. An even fairer system would see those living in neighbouring suburbs pay a little back too for the convenience.

If we looked at the original windfall gain real estate agents expect of $158, 250, the value capture charge would barely affect it, taking off just $20,700 from the total property valuation. How? The average $1,035 payment is multiplied over the 20 year life cycle of a property and subtracted from the windfall, leaving $137,500 – 87% of the gain.

87% sounds very reasonable – but to discuss this in the political sphere, as the Prime Minister reminded us hysterically yesterday, is to threaten one’s private property. However, if the value capture approach was adopted, we could all contribute according to the benefits received at least cost. The self-funding nature of the process could occur at a rate capable of offsetting the tremendous fall in infrastructure investment under this government, generating much needed employment. In recognising the quid pro quo, this fine city could once again enjoy the tagline of ‘on the move’.