Auckland Council’s Governing Body this week will consider a revised Contributions Policy 2019, a key funding source to support the significant infrastructure investment required for Auckland’s rapid growth.
At a meeting on Thursday, Councillors will be considering several amendments to the policy based on public feedback and will decide whether to adopt the policy with effect from 1 January next year.
Auckland is growing quickly. Its population is expected to reach around two million by 2028 and 313,000 more houses and workplaces will be needed by 2050.
In response to this unprecedented growth Auckland Council’s 10-year Budget 2018-2028 included more than $26 billion of infrastructure investment to improve Auckland’s transport, support the provision of housing and enhance our environment.
However, it’s critical that infrastructure keeps up with the demands of new developments.
Andrew Duncan, Manager Financial Policy, says development contributions are a way that the council can recover a fair share of its infrastructure investment from the development that it enables.
“These charges fund transport, stormwater infrastructure, parks acquisition and development, and some community infrastructure.
“The policy has recently been reviewed to consider where improvements can be made to ensure these planned costs are met into the future,” he says.
The council consulted on the draft Contributions Policy 2019 from 19 October to 15 November 2018. 61 responses were received including 44 submissions from developers. 23 developers presented to the Governing Body workshop on 23 November 2018. The council has responded to this feedback with a number of key changes to the draft policy.
“We have been listening to developers and members of the public and are recommending some changes to our draft policy in this area to ensure it is as fair as possible,” Mr Duncan says.
What changes are being recommended to development contributions?
Cost: The cost of development contributions has been updated to reflect the recently adopted 10-year Budget 2018-2028, and a review of capital expenditure to ensure developments have a strong connection to growth and the delivery of housing outcomes.
The policy proposes an increase in the capital expenditure to be funded by Development Contributions and a rise in the indicative average urban Development Contributions price from $21,000 to $25,000 (excl GST).
Demand factors: This considers the varying impact that different types of development have on transport infrastructure. It is proposed not to make any changes in this area until further investigation is completed, including more engagement with developers and the public.
Extending the timeframe for payment: Developers prefer to pay development contributions as close as possible to the potential sale of land or buildings. Therefore, we have proposed changes to payment timing that better lines up with when residential builders sell their developments.
How are development contributions set?
A Contributions Policy must strictly comply with the requirements of the Local Government Act 2002 which specifies how a policy is set and the assessment of contributions.
The charges are calculated by dividing the council’s capital expenditure for growth by the estimated number of new residential and non-residential developments.
