Paying homeowners for emotional loss?
While most homeowners have sold their homes through a negotiated process without the government resorting to formal expropriation Smit says governments should review how payments are made in addition to only compensating on fair market value.
She said fair market value several decades ago “was seen as very progressive” because it was “objective” and “more predictable than what had been in place before.”
But countries like Britain, Australia and New Zealand now take into consideration emotional distress or loss of being forced to give up a house.
In Britain the additional payout is 10 per cent of fair market value.
In some New Zealand jurisdictions it’s a flat $2000.
Smit admitted it could be difficult to put a price tag on emotional loss.
She said in the case of residents living along Talbot Rd., some have lived there 60 years, others have moved into new developments just months ago.
Smit it said not only would homeowners benefit from the additional compensation.
She said governments sometimes turn to expropriation too easily.
If they had to take other matters into consideration “it might force public authorities to think a little bit harder about planning sometimes.”
Smit also raised a question about how compensation has been negotiated.
She said many of the people whose homes have been bought out to make way for the parkway have expressed concerns about the process’s transparency.
She said each case has been negotiated separately and no one knows for certain how much money another property owner has received.
“And without a standard or some transparency about what those numbers are I think it’s sometimes hard to feel satisfied” that someone has been compensated fairly.