A rapid analytics tool to map the effect of rezoning on property values

Abstract

Cities are continually evolving through adjustments to zonings. The potential to integrate more equitable and effective value capture mechanisms into the rezoning process makes estimation of increases in land value from rezoning of interest to urban planners. The use of Residual Land Valuation (RLV), while accepted practice in development feasibility calculations, tends to be absent from the rezoning process because it is outside the skill set of most planners. Also, RLV has historically been applied to individual land parcels with limited potential for wider estimation of land value, and is generally not embedded in planning tools limiting the potential for value capture mechanisms to be included in the early scenario phases of rezoning decisions. This study addressed these issues. An RLV tool to estimate value uplift from rezoning was developed and embedded into a planning support system called Rapid Analytics Interactive Scenario Explorer (RAISE) to explore densification options associated with transport-oriented development. The co-design of the RLV tool with end-users and its test in a real case scenario in Greater Sydney has demonstrated the potential of RAISE-RLV. Specific advances included development of an algorithmic approach to RLV, that could be automated and applied across multiple parcels of land in rapid response to changing zoning. Second, such calculations were incorporated into a platform compatible with established rezoning decision making processes. The study demonstrated that it is possible to include RLV in a platform that improves users' understanding of the valuation process. The RAISE-RVL approach and tool can make a significant contribution to well-considered urbanisation. In addition, in the current era of tight government budgets, properly informed value capture mechanisms are a promising strategy for funding new infrastructure supporting both urban growth and the broader goals that growth can realise.