Eugenie Sage

Where will cost of new property development fall?

by Eugenie Sage

The National Government continues to undermine local democracy and erode the autonomy of elected councillors with its plan to limit what local authorities can charge as development contributions.

Councils can currently afford the infrastructure costs associated with new subdivisions and other land developments by charging what is called a “development contribution”. This helps pays for infrastructure and essential services such as new roading, street lighting, running water and the extension or upgrading of sewage and stormwater systems.

Development contributions currently make up about 4% of the total cost of building a new house in Auckland.  Capping them and removing planning controls which establish urban limits in order to facilitate more greenfield subdivision is not the solution to housing affordability  that the Government claims.

If councils cannot recover from land developers the real costs of bringing essential infrastructure and services to new homes and commercial developments, then those costs would have to be met by increased rates, reduced maintenance, or cuts to other council services and budgets.

Once again National is interfering with local government’s ability to set their budgets and manage the services they provide with no decent justification. It is favouring one sector, property developers, at the expense of the wider community and their wellbeing.

The Government is accepting submissions until 15 March 2013. Find more information here

Published in Economy, Work, & Welfare by Eugenie Sage on Thu, February 14th, 2013   

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