Aucklanders are being encouraged to have their say on a new Auckland Council policy for development contributions.
Manager of Financial Policy at Auckland Council, Andrew Duncan said providing the infrastructure to support expected growth was a key council function.
“Infrastructure allows new developments to be built and ensures Aucklanders have access to the activities and services they expect,” he said.
“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.”
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, Council said in a statement.
“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,” it said.
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
Council says it 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 $25,000 to $98,000, Māngere from $18,000 to $29,000, Mt Roskill from $20,000 to $52,000, Tāmaki from $31,000 to $119,000.
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, Council says.
“The 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 not the cost of land and building. National and international evidence shows that rather than impacting housing prices, an increase in development contributions could lead over time to a reduction in the price of undeveloped land,” it stated.
Aucklanders can have their say on the plan here.
