The Government says changes to the Local Government Act will ensure councils can set appropriate development contributions that reflect the growth-related infrastructure costs associated with Fast-track projects.
Last month, the Government announced it would amend the Local Government Act 2002 to give councils better tools to recover these costs.
The changes will be progressed through an Amendment Paper at the Committee of the Whole House stage of the Local Government (System Improvements) Amendment Bill, to be considered by Parliament this week.
“Fast-track is helping desperately needed housing, infrastructure, energy and investment projects move through the consenting system without being bogged down in unnecessary red tape,” said Housing and Infrastructure Minister, Chris Bishop.
“Fast-track approval does not give developers a free pass to build irrespective of infrastructure constraints. Expert panels can and already are imposing conditions requiring roads, water, wastewater and other infrastructure to be in place before development can proceed.
“The issue we are addressing is where existing development contributions do not adequately account for the development enabled through Fast-track, because they reflect what is anticipated in a district plan rather than the proposed use of the land.
“That can happen where a development proceeds sooner than anticipated in council infrastructure planning, brings forward the need for a major network upgrade, uses capacity that had been planned for growth elsewhere, or relies on infrastructure across council boundaries.
“Where a development creates additional infrastructure costs, an appropriate share should be met by the development rather than being shifted onto existing ratepayers.”
Local Government Minister, Simon Watts said the changes will allow councils to amend their development contribution policies where necessary to recover eligible growth-related capital costs associated with a Fast-track development.
“Importantly, councils will be able to make those targeted amendments without going through the usual consultation process, allowing them to respond quickly where an existing policy does not adequately reflect the infrastructure demands of a development,” Mr Watts says.
“Any amendment will need to be adopted within six months of Fast-track approval, notified to the authorised person and published as soon as practicable.
“We are also addressing cross-boundary infrastructure costs. Where growth in one council area creates eligible infrastructure costs for another council, the collecting council will be able to recover those costs and transfer the appropriate share of the development contribution.
“Council boundaries should not prevent the fair recovery of infrastructure costs created by growth.”
The new settings will apply to all Fast-track projects unless an applicant has received a draft decision to approve or decline the project when the legislation comes into force.
“They won’t apply to projects already approved,” Mr Bishop said.
“This creates a clear transition point and helps councils recover infrastructure costs from eligible projects while giving certainty to projects within the fast-track process.
“Fast-track has been a much-needed circuit breaker for projects that should be creating jobs, delivering homes and growing local economies. These changes maintain that certainty and effectiveness while making sure the infrastructure funding system can keep up.”
The changes are an interim step towards the Government’s wider overhaul of infrastructure funding through its Going for Housing Growth programme.
“Going for Housing Growth will help unlock more homes for New Zealanders by fixing the fundamentals of our housing market and making housing more affordable,” Mr Bishop says.
“The programme is focused on three practical changes: freeing up land for development, removing unnecessary planning barriers, improving how growth infrastructure is funded and financed, and giving councils and communities stronger incentives to support more housing.
“As part of this work, we are replacing development contributions with a more flexible Development Levies system, giving councils better tools to plan for and fund the infrastructure needed for growth. Further details on the design of the system will be released shortly.
“Development Levies are expected to be in place from 2029 and will support councils to respond more effectively to growth over the long term.
“In the meantime, councils need workable tools now. These changes ensure the existing development contributions system can work effectively alongside Fast-track.
“Fast-track is about enabling growth and investment. This is about making sure the infrastructure funding system keeps pace with that growth, while protecting ratepayers from costs they should not unfairly be expected to carry.”
Several amendments are being made to the Act, including to support council-controlled water organisation borrowing and ensure a smoother transition to the new system for council codes of conduct and standing orders.
“This will give councils increased ability to invest in critical infrastructure and pay it off over the long-term to match the life of the assets,” Mr Watts says.
“As already announced, the Bill will also be amended to strengthen local democracy and accountability by clarifying that non-elected members of council committees will not have voting rights, subject to specified exceptions.”
It has been confirmed that the change also applies to members of Houkura, the Auckland Council’s Independent Māori Statutory Board.
“The Board will continue to perform its functions and provide advice to the council – this change is being made to ensure fairness and consistency across Government policy. There will be a 6-month transition period,” Minister Watts said.
