Tauranga ratepayers could be lumped with a $17 million bill if proposed changes to housing development legislation are pushed through unchecked, according to Mayor Stuart Crosby.

Mr Crosby will today meet Tauranga MPs Simon Bridges and Tony Ryall to discuss the financial implications of Housing Minister Nick Smith's bill, which will change how councils can spend developer contributions (DCs) and what fees they can charge.

The legislation limits what councils can charge in respect of commercial and industrial developments and means developers will no longer pay for recreational facilities or reserves for developments that do not involve residential housing.

The bill is designed to make housing affordable, according to Dr Smith, who says the charges on housing developments have gone up more than any other component of housing costs over the past decade, from an average of $3000 to $14,000 and as high as $64,000 in some communities.


"Development contributions need to be set in a way that fairly balances the costs that should rightly rest with a new development and those of community benefit that should be paid by general ratepayers," he said.

However, Mr Crosby said the changes could see ratepayers lumped with a debt of around $17 million for the ASB Arena, Baywave and the Mount Greens Complex - projects currently partially covered by DCs, unless the Government agrees to ring fence the debt until it is paid off.

He said he will be asking the local MPs allow council to continue to seek contributions from developers to cover the current debt to ensure it does not go to ratepayers if the legislation is passed mid next year.

"I will also be making a submission to that effect to the select committee during the appeal process," Mr Crosby told The Bay of Plenty Times.

"The legislation proposes to prohibit us from collecting developer contribution on certain projects like Baywave and the ASB Arena and others. We have analysed that as a $17 million risk to ratepayers," he said.

"Those projects sit in DC debt at the moment and are paid back through DCs.

10 Dec, 2013 9:30am
3 minutes to read

"But this legislation could see that change and the estimated $17 million debt we have from those projects could be transferred to rates debts.

"I want to make it clear to Mr Ryall and Mr Bridges what the financial implications for ratepayers will be and ask that council be allowed to continue seeking developer contribution until those debts are paid off so that ratepayers will not be lumped with the bill."

Mr Crosby said he had no issue with the bill as a whole and was happy to work within the new legislation for new projects.

"I am fine with the new restrictions for new projects but I cannot abide ratepayers having to foot the bill because something has been changed halfway through."

At Wednesday's meeting council placed conditions on a decision to fast track Papamoa's Te Okuroa drive and the related water main because of the uncertainty surrounding the proposed legislation.

Mr Crosby said council could not afford to forward fund the growth in such an "uncertain DC environment".

Council voted to place the cost of fast tracking the works on the draft annual plan subject to the outcomes of the bill.

"We need to understand the financial outcomes of the changes before we start promising anything.

"I will not have our ratepayers become a bank," Mr Crosby said.

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