Auckland Council Development Contributions
What You Need to Know
Development Contributions are one of the biggest upfront financial outlays of project, seen by some as a tax on development, they are a means of Council funding growth in infrastructure network capacity, roads, parks and other community facilities.
Hence knowing the outlay, and which areas of the city are going to attract higher contributions are important cost considerations for planning the funding of a development and assessing its feasibility against forecast revenue.
Why is This Happening?
Auckland’s rapid urban growth is putting significant pressure on parks, community facilities and infrastructure. Much of the planned capacity of infrastructure that serves the city has been taken by decades of 2nd dwelling infill development that didn’t pay any contribution prior to the early to mid 2000’s as the financial Contributions chapters of the City and District Plans became operative under the RMA. To assist the council’s inability to recover these costs the Local Government Act was amended in 2006 and since then infrastructure, road, new community facilities and parks have all been funded through this mechanism.
The other driver is the significant population growth bought about by government immigration policy that has driven the housing market for many years. In making provision for a greater housing capacity the Unitary Plan and other planning instruments under the RMA have promoted intensification of existing urban areas rather than continued sprawl, hence we are now asking more of the old network assets than they were originally planned to deliver. On other areas the water quality needs addressing. Public awareness and acceptance of closed beaches and ill health from contaminated water bodies is a thing of the past – if it ever was acceptable…
What is Being Done About It?
The need for the upgrades is increasingly urgent, bringing the planned time frames for many infrastructure projects forward and adding new projects to the list to cater for the now greater planned population densities than were catered for historically in many areas.
Over the last 6 months Council has gone through a consultation process for a new Development Contributions Policy that will form the basis of funding through to 2034. This has a new/revised list of projects, and a funding plan based on a planned delivery time frames.
As a user/demand driven cost, funding is applied for each cost centre based on where it is needed, so the city has a series of maps for each infrastructure cost centre and a Development Contribution rate based on the planned work for that area that needs to be funded. The currently planned date of notification of the decision is 01 May 2025, with a yet undecided implementation date to follow.
Council would normally update the rates with each financial year, so the new rates should be expected to apply from 1 July 2025 if not some time in later May or June if the wheels of implementation can bring the implementation date forward. The message from council staff is that Council will try to implement the new policy as quickly as it can.
How Will This Affect Development?
For developers, the Development Contributions which are payable with a Building Consent are a significant cost. The timing of generation of the invoice by Council is with the issue of the Building Consent. Hence there is an issue of timeliness in applications to avoid rate rises.
For some areas the total cost is significant. Some examples provided by the Council are:
• the Inner Northwest from $25,167 to $98k
• Māngere from $18,123 to $29k
• Mt Roskill from $20,406 to $52k
• Tāmaki from $31,157 to $119k
What Can You Do?
Before proceeding with a development, it’s crucial to budget your project. Hence factoring the Development Contributions as well as the other land, building work, consents and consenting fees is incredibly important.
You can access more information about the planned changes including the new Policy and Rates here:
https://akhaveyoursay.aucklandcouncil.govt.nz/development-contributions-review-2024
You can access the current 2024 Policy and Rates here with a helpful calculator tool:
How CLC Consulting Group Can Help
At CLC Consulting Group, we specialise in development appraisals and cost projections for developments in our Development Reports.
Our team can:
• Assess network and planning constraints based on your proposed development.
• Liaise with infrastructure providers to determine feasibility and potential solutions.
• Provide engineering advice to mitigate wastewater capacity issues.
• Advise of Development Contributions and other Infrastructure and Consenting costs
If you are planning a development, we recommend getting in touch with us early to ensure your project is not impacted by infrastructure constraints and that you know the contribution rates early in your project feasibility and financial planning.
Contact us today to discuss how we can assist you with development planning.
