Changes to fast-track development contributions welcome but problems remain

Government changes to give councils a greater share of development contributions from fast-tracked housing projects are being cautiously welcomed by Local Government New Zealand (LGNZ), though problems remain with how fast-track operates in practice.

Under new proposals announced today, the Local Government Act 2002 will be amended to allow for changes to Development Contributions. This will enable councils to recover costs where existing policies do not adequately reflect the demands on infrastructure created by a fast-track development.

LGNZ President Rehette Stoltz said that while councils were on board with a new approach being taken to housing, today’s proposal hadn’t resolved other issues with out-of-sequence development under fast-track rules.

“Some of the fast-track developments are high quality, supported by communities and consistent with local plans for growth. However other fast-track projects result in houses built in unsuitable or even dangerous areas.

“This heaps pressure on existing infrastructure or means the development simply can’t be serviced by councils. These developments potentially create heavy liabilities for councils down the line. To add insult to injury, some are being heavily subsidised by ratepayers, counter to the goal that growth should pay for growth.

“These issues have been compounded by fast-track’s failure to consider the cumulative effect of multiple fast-track developments in one area, as we’ve seen in places like Selwyn and Auckland.”

Queenstown mayor and LGNZ Infrastructure Reference Group deputy chair John Glover said that while today’s announcement went some way to improving councils’ ability to recover growth costs from developments, there were still too many projects already approved that these changes would not apply to.

“These kinds of developments unfortunately create infrastructure funding gaps of hundreds of millions of dollars. This means that either communities are left to cover these costs or cope with inadequate infrastructure investment.” 

Glover said there needed to be stronger safeguards introduced to ensure council concerns about issues such as flooding risk were acted upon by fast-track panels.

“There also needs to be greater consideration of developments’ cumulative effect, clearer standards for privately provided infrastructure, and a fresh look at whether developments outside of zoned growth areas should progress through a fast-tracked process at all.”

Stoltz added that LGNZ understood that New Zealand’s housing shortage was something the fast-track process was trying to address, that’s why it had been also been working on ways to streamline the housebuilding process.

"We appreciate that paying the development contribution charge upfront can be a barrier to getting housing builds off the ground.

“That's why we propose allowing development contributions to be deferred through the Ratepayer Assistance Scheme, so more houses are built sooner.

"Local Government has developed this tool which enables councils to collect the development contribution upfront, ensuring ratepayers aren’t subsiding the infrastructure required and removing a barrier to building homes."