The Auckland Council has proposed a significant increase in development contributions, the monetary fees paid by residential property developers to fund local infrastructure projects.

Currently calculated over a 10-year timeframe, the council is now suggesting these be calculated over a 30-year timeframe, leading to substantial cost increases for developers.

The average development contribution in Auckland is expected to rise from $21,000 per lot to approximately $50,000 per lot. In certain areas, such as Tamaki, the increase is even more pronounced, jumping from $31,157 to $119,000 per lot. The Inner Northwest region will see contributions soar from $25,167 to between $89,000 and $101,000 per lot.

Troy Patchett, Director of Auckland residential development company Subdivide Simplified, expressed concern over the proposed changes.

"This increase has the potential to slam the brakes on housing developments. Many developers won't be able to pass these costs on to consumers, rendering some projects unviable. This could further inhibit future development and exacerbate the housing shortage in Auckland, New Zealand's largest and rapidly growing city," Patchett stated.

“This could lead to fewer housing development and an upward pressure on the value of existing stock”.

Patchett strongly advises those considering development to submit their council applications as soon as possible. "If you can get your applications in before March, you should only need to pay the current development contributions and won't be exposed to this increase. Don't wait to start your development projects," he urged.

The calculation of development contributions happens when development applications are lodged, with the window for this expected to close around April.

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