- By Laura Kvigstad, Auckland Council reporter funded by New Zealand on Air
The Auckland Council’s draft Contributions Policy, aimed at recovering $2.3 billion over the next decade for infrastructure projects, is open for public consultation.
Among highlighted projects are a major $550 million upgrade for level crossings in Takanini, the creation of a $12.5m town square in Henderson, and an updated $59m plan for the Waterview catchment separation.
Mayor Wayne Brown says developers wanted to ensure they were not paying more than they had to, but that the council needs to protect ratepayers.
“Existing ratepayers should not have to actually subsidise future growth investors,” Brown says.
The council’s financial strategy general manager, Michael Burns, says its position for a long time has been growth should pay for growth.
“When push comes to shove there’s only three people that can pay: developers, ratepayers, or taxpayers.
“These costs are required for the development to happen,” Burns says.
Councillor Richard Hills asked what percentage of applicable infrastructure had been funded through developer contributions (DCs).
“What sort of percentage of the infrastructure needed is coming from DCs now – is there a direction we are moving? It is 20 per cent? Are we trying to move to 50 [per cent]?”
Financial policy manager Andrew Duncan says the council could not retroactively charge development contributions so it’s important to get it right.
“If we don’t plan for these investments now and include them in the policy, then by that time we might have foregone somewhere between $400m and $600m of revenue.”
Duncan notes a breakdown of funding sources over the next 10 years estimates that for transport investment $3.5b would come from rates, $3b would come from the Government, and $900m would come from DCs.
Burns responded that the sooner projects are included in the policy the better.
“If these projects are left out of the policy and then when we eventually do need to do them, because we will need to do them, people will have not paid and the ratepayer will be subsidising it,” Burns says.
Councillor Josephine Bartley says developers have already approached her.
“I’m hearing from the major developer in my area that the cost will be borne by the homeowner.”
Duncan responded that all the economic advice so far indicated that the development contributions would flow through to land prices and not homeowners.
“The council’s staff a few years ago looked at all the literature on how increasing these sorts of charges impacted on house prices and found that they didn’t,” Duncan says.
He says if developers could increase prices they would be doing so, and it was the wider housing market that dictated the cost of houses.
Public consultation on the council’s draft Contributions Policy is open until November 15.
