The Finance and Performance Committee has unanimously approved a new draft Contributions Policy for consultation and will be seeking feedback from Aucklanders from 20 September 2021.
The draft Contributions Policy 2021 has been updated to reflect investments made in The Recovery Budget (our 10-year Budget 2021-2031), capital expenditure and legislative change since 2018, and revised development forecasts.
Finance and Performance Committee Chair Cr Desley Simpson says, “There is exponential housing growth in Auckland and we’ve seen the devastating impacts of failing to plan ahead for infrastructure in other regions across the country.
“Contributions are one of the ways the council recovers the cost of essentials like stormwater and transport infrastructure as well as parks and community facilities. This infrastructure needs to be funded one way or another - either by the developer, the ratepayer or the taxpayer. The question is, what is the appropriate share for developers to pay.”
In addition to the updates for the 10-year Budget, the committee has approved the following for consultation:
- addition of capital expenditure planned for 2032 onwards in Drury
- requiring payment of development contributions for all development due at building consent at the grant of consent except non-commercial development on Māori land
- identifying that facilitation of the development of Māori land is made through grants under the Māori Cultural Initiatives Fund
- exempting not-for-profit development on Māori land from contributions for reserve acquisitions.
The proposed updates lower the weighted average development contribution (DC) from $23,900 to $21,500. However, some areas in Auckland, starting with Drury, would experience an increase in contribution levels as the council seeks to add projects planned beyond 2031 to support growth.
Manager of Finance Policy Andrew Duncan says more infrastructure is required to cope with expected growth, “Currently, contributions are charged to recover the cost of infrastructure planned in the next 10 years. The council’s 30-year Infrastructure Strategy ensures future development has the high-quality infrastructure Aucklanders expect and that we can better manage the impacts of growth, including climate change.
“We propose that an appropriate share of the cost of investment this growth creates a need for, or will benefit from, including investment planned beyond 2031, is recovered through development contributions.”
“All development over the next 30 years will benefit from this. We will amend the contributions policy in stages for each investment priority area as more information on infrastructure requirements becomes available, starting with Drury.”
The draft policy includes almost $2.5 billion of investment in local and arterial roads and parks in the Drury area. Under the new draft policy the level of contribution would rise from between $11,000 and $18,300 currently, to $84,900.
The Council’s Acting Chief Economist Shane Martin, reiterates the relationship between development contributions and housing affordability, “National and international evidence shows us that an increase in contributions does not cause house prices to rise. The price of housing is not determined by the cost of land and building but by supply and demand.”
“This isn’t a question of whether this needs to be funded, this infrastructure is essential. The option here is who pays for it, and we don’t think the ratepayer should have to bear the bulk of that cost.”
Aucklanders are urged to partake in the consultation process to have their say on the proposals – whether or not you are a developer.
From 20 September the Consultation Document and opportunities to Have Your Say will be on the Auckland Council Website.