The amount of housing growth in Auckland is unprecedented. 10 years ago, fewer than 4000 dwellings were being consented in a year and in the last year we consented close to 20,000 dwellings. A lot of development is happening and all of this requires infrastructure to support it such as wastewater, stormwater, roads and community facilities.
Infrastructure is expensive.
Contributions are one of the ways the council recovers this cost. It needs to be funded one way or another - either by the taxpayer, the ratepayer or the developer. We think it is fair that developers pay an appropriate share.
The council is conducting a review of its contributions policy. Here’s everything you need to know.
Contributions (also known as Development Contributions or DCs) are a fee charged to developers to recover the cost of infrastructure caused by or that will benefit from the new development.
Revenue from these fees is used for new or upgraded infrastructure for transport, parks, sportsgrounds, drainage and stormwater systems or community facilities to support growth.
The last contributions policy became effective from 1 January 2019. We are now proposing a new contributions policy, with effect from 10 January 2022.
The council has had a contributions policy since amalgamation and it is regularly updated to account for updates to projected growth, revision to the capital budgets and any relevant policy changes. We’ve made some big and exciting commitments in the 10-year Budget so we need to update our contributions policy in order to fund these.
The Finance and Performance Committee is responsible for considering changes to the contributions policy. The committee will consider the draft policy recommended by council staff on 16 September 2021. If the committee approves the policy for consultation, Aucklanders will be able to have their say on the proposed policy from 20 September 2021. Once the committee has considered the feedback from our communities and made any necessary changes, the final policy will be agreed and adopted in December and any changes will come into effect on 10 January 2022.
Our staff provide expert advice to councillors to help ensure balanced and well-considered decisions are made. Elected members are in charge of making decisions. It is up to them whether they make decisions and that may or may not align with Auckland Council staff advice.
You can keep up with the progress by viewing agendas and committee meeting minutes on infocouncil.
The draft contributions policy has various proposed changes, some of which simply suggest small changes to fees to match the requirements of investment in the 10-year Budget. The key changes to the policy being considered are as follows:
The cost of infrastructure has to be funded somehow. If it is not being funded by the taxpayer, it is either the ratepayer or the developer that pays. We think it is fair that developers pay for an appropriate share of the infrastructure their developments require.
The 10-year Budget includes a substantial increase in investment in infrastructure to support growth and allow development to proceed. In the draft policy, contributions do not increase on average but across the region some areas will see increases depending on the level of investment we have committed to and the growth we are expecting. This allows us to fund investment.
Raising the price of contributions:
Once the Finance and Performance Committee has approved the draft policy for consultation, the Consultation Document will be live on the Auckland Council website, where you can register for Have Your Say events.
Developments that require a subdivision consent, land use consent or building consent are assessed for contributions. This includes:
Extensions to a house don’t have to pay contributions. Different types of development pay different contributions. Contribution prices are set at different levels depending on the demand they place on the need for the council to invest in infrastructure.
For example, a shopping centre will require more transport investment than a house. The transport contribution will therefore be higher. However, shopping centres don’t require investment in parks and community facilities. These are only charged to residential development such as a granny flat.
You can read more about the different development types and associated costs in our contributions policy.
DCs are calculated by dividing the council’s capital expenditure for growth by the estimated number of new residential and non-residential developments.
To understand how the council calculates DCs, read How we set Development Contribution charges.
National and international evidence shows us that an increase in contributions fees does not cause house prices to rise over time.
The price of housing is not determined by the cost of land and building but by supply and demand for houses.
Over time the Development Contribution costs are deducted from the price paid for land.