Tensions between the Government and Auckland Council over fast-track housing came to a head this month.
The dispute is over who pays for the roads, pipes and pump stations that fast-track subdivisions need.
The Council says fast-track approvals are letting large developments through in places where it has not planned or budgeted for infrastructure, leaving ratepayers to cover the shortfall.
Councillors voted unanimously on 8 September to have staff test whether the Council can withhold or reduce services to fast-track and out-of-sequence developments, and recover the greatest possible share of the cost from developers.
The Government responded a week later with a law and policy change that will let councils rewrite their infrastructure charges on Fast-track projects, without going out to public consultation first.
The problem, Housing and Infrastructure Minister Chris Bishop said, is that a council’s charges are set against what its district plan expects, not against what a Fast-track panel allows.
“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,” he said.
“Where a development creates additional infrastructure costs, an appropriate share should be met by the development rather than being shifted onto existing ratepayers.”
Bishop also defended the regime the charges will fall on.
“Fast-track approval does not give developers a free pass to build irrespective of infrastructure constraints,” he said.
Local Government Minister Simon Watts said councils would be able to amend their development contributions policies “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,” Watts said.
Any amendment has to be adopted within six months of the project being approved.
Where growth in one council’s area drives costs in another, the collecting council will be able to pass on a share.
“Council boundaries should not prevent the fair recovery of infrastructure costs created by growth,” Watts said.
The announcement follows the Policy, Planning and Development Committee meeting of 8 September, where councillors adopted a resolution noting that the known pipeline of unanticipated development could reach 60,000 new dwellings.
The same resolution put the likely infrastructure cost at up to $5 billion, about $3 billion of it growth-related and about $2 billion not.
The non-growth share is the part the Council cannot recover from developers through development contributions.
Later that day the Council issued a media release announcing a stronger stance on what it calls unanticipated development, and confirming that staff will bring a formal response back to the committee in October.
Committee chair Richard Hills said the Council supports well-planned growth but cannot absorb the rest.
“Large developments are increasingly proposed where growth isn’t planned and infrastructure isn’t in place,” Hills said.
“The council is then forced to fund the long-term infrastructure and service costs with budgets that are already tightly pinched.”
“The fast-track approvals scheme has magnified this, and rates capping will further limit councils’ funding.”
“Ratepayers cannot be expected to carry the costs of developments that we have had no opportunity to budget for.”
At the meeting itself some councillors were more forthright.
Hills told the room that between the rates cap and the limits on targeted rates, “we are hamstrung in every direction to actually do this”.
Manurewa-Papakura councillor Daniel Newman was blunter still.
“I think we’ve tried the strategy of shouting at the unanticipated growth for it to go away, and it hasn’t, so now it’s here,” Newman said.
He did not believe the Council could simply refuse.
“I just do not believe that you will be able to say not in sequence, we don’t agree with it, this you shall not pass,” he said.
“Because clearly it’s getting through.”
Newman argued price was the only mechanism left.
“Surely the most effective mechanism therefore is to properly price the consequences of these developments in terms of the growth rate and cost,” he said.
He referred to a development which may also force an upgrade to transmission infrastructure, where the charge could reach $200,000 per dwelling.
“So be it,” he said.
“Eat that and pass it on to the new property owner if that’s what you want to do.”
The new settings will apply to every Fast-track project unless the applicant has a draft decision by the time the law comes into force.
The amendment paper goes before Parliament at the Committee of the Whole House stage this week.
Council staff are due back at the planning committee in October with advice on whether targeted rates, or withholding services, would survive a legal challenge.
