The Baird government just had another big change of heart, this time over compensation for compulsory home acquisitions

Yer dreamin’. Picture: Village/Miramax

The NSW government will offer an extra $47,765 to people who’ve had their homes taken from them by the government over the last three years in a belated response to a review of the state’s compulsory acquisition laws.

Stung by sustained criticism of the compensation process when homes are lost to infrastructure projects, and Mike Baird’s plummeting popularity in recent polling, the premier and finance, services and property minister Dominic Perrottet appear to have made another backdown, promising to improve the acquisition and compensation process.

Projects such as the controversial $17 billion WestConnex project, which saw 180 properties in Sydney’s inner west taken by the government, along with hundreds more similar acquisitions for NorthConnex, the Sydney Metro and Sydney and Parramatta light rails, have provoked a growing backlash against the government. The cost of the acquisitions is expected to exceed $500 million.

A 2013 NSW parliamentary committee into the NSW land valuations found the compulsory acquisition system was “unfair and inadequate”.

Barrister David Russell handed the NSW government his review of the laws in 2014, but it was not publicly released and two months ago, Fairfax Media published a leaked letter from Perrottet to Baird last December telling the premier to ignore Russell’s recommendations.

“The key concern of agencies, such as Roads and Maritime Services, is that a number of the recommendations would likely have adverse impacts including increased disputation, valuation complexity, additional costs and delay to the completion of infrastructure projects,” Perrottet wrote to Baird.

“On this basis, I recommend that at this time no further action be taken to address the review report.”

In June, Baird asked Customer Services Commissioner Michael Pratt to review how the RMS managed the forced acquisition process and after details of Perrottet’s letter emerged, the minister said he’d subsequently had a change of heart, writing to the premier again last February seeking “additional reforms”.

In the meantime, homeowners have complained that offers are well below market value and that the negotiation process is fraught and stressful. Adding insult to injury, the acquiring authority, the NSW Roads and Maritime Services, has demanded homeowners pay the RMS rent while disputes over the value of the properties are adjudicated.

Today, Baird and Perrottet announced homeowners will get more information, more time, more support, and extra compensation for losing their homes to infrastructure projects.

“These reforms ensure we have a process that is generous and fair and opens the lines of communication between homeowners and authorities,” Baird said.

The changes include raising the compensation for the inconvenience and stress from the current level of $27,235 to up to $75,000. The figure will be backdated to February 2014.

Former landowners will also get first right to repurchase an acquired property if it is no longer needed and there will be a 6-month period before the compulsory process begins, for landowners to agree on a fair compensation figure. Landowners will also have dedicated case managers to help them understand their rights.

Demanding property owners pay rent during the three months they are entitled to remain in the home after it is compulsorily acquired will be scrapped.

The minister will also take charge of the whole acquisition process.

“I am pleased to say that after hard work across a number of departments and agencies, we now have a more sensitive and supportive acquisition process than ever before,” Perrottet said.

Legislation on the changes is expected to be introduced to parliament this week.

Details on the reforms are online here.

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