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Data from leading law firm Slater and Gordon has revealed just one third of Melbourne residents were able to repurchase property within the same neighbourhood after being compulsorily acquired through the East West Link and Regional Rail Link projects.

Analysis of the firm’s client data found just 33 per cent of residents were able to buy a replacement property within a four kilometre radius of their acquired residence, including those who were able to buy-back their properties.

The majority of residents purchased property at least 18 kilometres from their communities, while almost one in four (24 per cent) moved more than 40 kilometres away.

Slater and Gordon Principal Lawyer Manisha Blencowe said the compensation available for compulsory acquisition was often insufficient for residents to repurchase locally.

“There can be a large gap between market value compensation and the true cost of purchasing a replacement property – the shortfall is forcing residents out of their communities."

“Many properties required for major projects are close to existing rail or road infrastructure, which usually means they have a lower valuation than the rest of neighbourhood.

“Acquired residents then find themselves desperately searching for something close by that is within their price range, but often come up short and are forced to move long distances.

“Cities need to modernise but it should not be at the expense of local communities – there must be a better solution than this.”

East-West Link Case Study: Jennifer Wong

Jennifer Wong had lived in her Parkville townhouse for 26 years when she received an East West Link compulsory acquisition notice in 2014.

Ms Wong inspected properties almost every weekend for a year before ultimately settling in Derrimut, more than 20 kilometres away.

“I started searching locally but had to look further and further out,” Ms Wong said.

“Even properties as far away as Ringwood were outside my price range and I’m close to retirement so couldn’t get a loan from the bank for the shortfall.

“If I’d bought my house back I’d be waking up every day worried the project would be resurrected, so I settled in the only suitable home I could find in my price range, in Derrimut.

“The length of my commute has tripled from 20 minutes to more than an hour and it’s lonely because I’m isolated from my friends and the community I was part of since 1988.”

Ms Wong’s claim is ongoing and she is still fighting for fair compensation.

Ms Blencowe said addressing social dislocation should be a priority for future projects, including the Melbourne Metro Rail Project.

“There is a real opportunity to learn from past projects and ensure residents affected by the construction of Melbourne Metro are not priced out of their communities,” Ms Blencowe said.

“Slater and Gordon has been in contact with more than 100 residents and business owners who are likely to be affected and many are worried about the future.

“The acquisition process is stressful and often involves significant personal sacrifice for residents who, at a minimum, should be afforded enough compensation to allow them to stay within their communities.

Ms Blencowe said a low or no-interest loan scheme could make a world of difference for dispossessed property owners facing financial hardship.

“The acquiring authority has the power to provide low or interest-free loans under section 45 of the Land Acquisition and Compensation Act 1986, but in our experience these requests are never granted,” Ms Blencowe said.

“These loans are only available to people with houses with a market value under $500,000, which is an increasingly small portion of the Melbourne property market.

“The maximum amount of the loan is then calculated as the difference between the market value of the acquired property and the $500,000 cap, which is usually next to nothing.

“Widespread dislocation and a booming property market tell us that the hardship loan cap should be increased and a more reasonable approach adopted when granting these loans, to ensure this safety net can do its job effectively."