Development contributions review in response to housing cost
Hon Dr Nick Smith
Minister of Housing
Hon
Chris Tremain
Minister for Local Government
10
February 2012
Media Statement
Development contributions review in
response to housing cost concerns
The
Government is looking at changes to the way Councils
charge for new sections and other developments by today
releasing a discussion paper as part of its work on housing
affordability and local government
reform.
“Section prices have more than doubled in
the past decade. A significant factor has been the sharp
rise in the development contributions charged by councils.
The average charge nationally has increased from $3,000 per
section to $14,000 per section over the past decade, an
increase of 360%, and can be as high as $64,000 per section.
These costs need to be contained if more kiwi families are
going to be able to afford their own home,” says Dr
Smith.
“Development contributions are needed to
enable Councils to provide the necessary infrastructure to
support new developments, but we also need to ensure the
costs are fair and well justified. There are pockets of
excellence in local government in the way infrastructure is
financed and we want to build on this to achieve greater
consistency and certainty. The current system has been in
place since 2002 and this review, as part of the Better
Local Government programme, is timely and needed," Mr
Tremain says.
The Development Contributions Review
Discussion Paper includes options for reform of the Local
Government Act 2002 to cap the charges, tighten the
criteria, reinstate appeals, provide discounts for types of
housing, change the timing of charging, enable alternate
provision of infrastructure and abolish the charges. The
paper builds on the recommendations of the Productivity
Commission inquiry into Housing Affordability and of the
Urban Design Technical Advisory Group that raised concerns
about the way the system of development contributions has
been working.
“We welcome feedback on these
proposals from builders, councils, developers and the wider
community. Our reform objective is a fairer system that
will support development and growth, and make home ownership
more affordable while supporting Councils efforts to improve
New Zealand’s infrastructure,” the Ministers
concluded.
Submissions are due with the Department
of Internal Affairs by 15 March. A copy of the Development
Contributions Review Discussion Paper can be viewed at
http://www.dia.govt.nz/vwluResources/Local%20Government%20Development%20Contributions%20Review%20Discussion%20Paper%20(pdf)/$file/Development_Contributions_Discussion_Paper_Jan2013.pdf
ENDS