Source: Auckland Council
Aucklanders are encouraged to have their say on a new policy for development contributions. The consultation is open from Monday 30 September until Friday 15 November 2024.
Development contributions are fees the council charges developers to help fund the cost of growth in Tāmaki Makaurau.
The council uses this money to help pay for new assets that are needed to support the new households or business properties that have been, or will be, developed in Auckland. This includes roads and footpaths, parks; libraries and community facilities; and drainage and stormwater systems.
Andrew Duncan, Manager of Financial Policy at Auckland Council, notes providing the infrastructure to support expected growth is a key council function.
“Infrastructure allows new developments to be built and ensures Aucklanders have access to the activities and services they expect.
“Tāmaki Makaurau is growing at a rapid rate – Auckland’s population is expected to grow by approximately 600,000 people over the next 30 years.
“Development contributions are a way of ensuring that growth pays for growth and the costs of infrastructure are fairly shared between developers, ratepayers, and funding from the government.”
Sharing the cost of growth
Over the 10-year period from 2024 to 2034 the council will be investing around $39.3 billion in its capital investment programme, which includes $10.3 billion of projects with a growth component. It’s also planning to invest $10.9 billion from 2034 to 2054 in the Investment Priority Areas at Drury, the Inner Northwest and the Auckland Housing Programme areas at Tāmaki, Mt Roskill, and Māngere. These areas are joint priority areas with the government and are key locations where the council can focus its limited resources. The development contributions policy makes sure the cost of new infrastructure is fairly shared between developers and ratepayers based on who causes the need for the infrastructure and who benefits from it.
Without this policy, ratepayers would be covering the share of the cost of providing growth-related infrastructure that would otherwise fall to developers.
What will the policy cover?
The proposed policy will reflect:
- the spending and investment decisions over the 10-year period of the Long-term Plan (2024-2034)
- latest projections for growth in population and interest rates
- updates to project costs
- updates to long-term investments in Drury.
It also proposes to plan for long-term investment in Investment Priority Areas (IPAs) over the next 30 years in a similar way to what the council is already doing for Drury. These are key locations where the council can focus its limited resources. They are all joint priority areas with government, and the additional areas are:
- inner northwest areas at Red Hills, Westgate and Whenuapai
- the Auckland Housing Programme (AHP) areas at Tāmaki, Māngere and Mt Roskill.
Updated investments planned to 2034 and changes to Drury
These policy changes will increase the average price of contributions from $21,000 to $30,000 per household unit equivalent (HUE), which is the requirement for a typical residential home. This figure includes the capital spend reflected in all 10 years of the long-term plan.
The council has reviewed the need for stormwater infrastructure in Drury, as well as the level of investment needed here over the next 30 years. As a result, the average price for development contributions in Drury will rise from $70,000 to $83,000.
Investment in the additional priority areas
The council has assessed the long-term investment requirements for the inner northwest and Tāmaki, Māngere and Mt Roskill using the best information currently available. The addition of $8.9 billion of investment over 30 years in these areas will raise the average price for development contributions in:
- the inner northwest from $25k to $98k
- Māngere from $18k to $29k
- Mt Roskill from $20k to $52k
- Tāmaki from $31k to $119k.
The proposed higher development contributions reflect the value of the infrastructure that will be required to support development and will ensure that developers pay a fair share of these costs.
The council’s economic analysis shows that higher development contributions do not generally lead to higher house prices. The price of housing is determined by supply and demand for houses rather than the cost of land and building. National and international evidence shows that rather than impacting housing prices, an increase in development contributions could lead to a reduction in the price of undeveloped land over time.
Have your say
You can tell us what you think of the policy on the council’s Have Your Say webpage. You can also join one of our events.
Join our webinars on:
Come see us in-person at the Ellen Melville Centre at 2 Freyberg Place, Central Auckland 1010 in:
- the Marilyn Waring room on Thursday 17 October from 10am – 11.30am
- the Elizabeth Yates room on Thursday 31 October, from 1pm – 2.30pm
We want to hear your views. Have your say on the proposed development contributions policy from Monday 30 September until Friday 15 November 2024.
