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Development contributions bill wasted opportunity



Housing Spokesperson


Development contributions bill wasted opportunity

National’s proposed changes to the rules on development contributions would make little difference to housing affordability, and are yet another example of Housing Minister Nick Smith chasing a headline, Labour’s Housing spokesperson Phil Twyford says.

“The proposed changes are better than nothing, but that is a low bar.

“Giving developers the right to appeal development contributions, and stopping Councils from levying developers for community infrastructure like halls, reserves and swimming pools may deliver a small cost saving on the price of a new home, but the costs will either be shifted to ratepayers or we will see lower quality developments built without essential community amenities.

“This is National kicking the can down the road, instead of seriously grappling with the challenge of making new housing more affordable.

“Ratepayers will be unimpressed with National’s move to have them pick up more of the tab for new developments. Auckland Council says it will add 8.5 percent to the average rates bill of Auckland households by 2021/22.

“If the Government was serious about making housing more affordable it would have done a more fundamental rethink of how to fund infrastructure costs for new urban development.

“No thought has been given to how development contributions could be used to incentivise more desirable forms of development.

“Nor has any consideration been given to the idea of spreading the cost of infrastructure over its lifetime by funding it through bonds paid back through a targeted rate. This approach wouldn’t reduce the cost but by spreading it over a 30 year period would lower the up-front cost for first home buyers. These ideas have been advocated by the NZ Initiative, based on the Municipal Urban Development (MUD) entities in Texas.

“It wouldn’t fit Nick Smith’s classic approach of blaming Councils and then passing a Bill that pretends to make a difference, but more practical benefits might be achieved by tackling productivity improvements in the way infrastructure providers deliver the range of services for new developments. Some of the larger new developments have made significant savings through more sophisticated process management in laying down electricity, broadband, roads, lighting, and water infrastructure.”

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