Builders and developers overwhelmed the Tauranga City Council with $76 million worth of building consent applications last month in a last-minute bid to avoid a new hefty $7500 fee.
The council received more than 500 building consent applications in July - "roughly twice as many" as usual - and is asking people to "be patient" due to the "bottleneck" of applications.
A total of 201 building consents valued at nearly $76 million were issued in July, including more than $16m worth in the Tauriko Business Estate alone, which a local commercial agent said was only a "fraction" of what was to come.
The citywide development contribution for a three-or-more bedroom home increased from $12,208 to $19,708 on August 1. It will jump a further $8849 to $28,557 on February 1 next year.
For commercial development, the fee increased from $3091 to $5089 per 100sq m of gross floor area on August 1 and will rise to $7077 on February 1.
The extra money would help pay for the Waiāri Water Supply Scheme. The council has said without the fees, borrowing for such projects to support the city's future infrastructure would have to be repaid by ratepayers.
Ray White Commercial Tauranga managing director Philip Hunt said the consents were just a fraction of what had just been lodged until the end of July.
Hunt said the council's "knee-jerk" decision to "dramatically" increase the building impact fees had affected all consents applied for from August 1 and caused a bottleneck of applications.
Many developers he worked with had rushed to lodge consents before August 1 and he suggested a month later could have helped ease the pressure and not caused such a "jam up".
Hunt said he knew of about half a dozen developers that had lodged building consents in Tauriko Business Estate that would have to wait at least another couple of months before they can be approved.
"That is extremely frustrating.
"I have over 50 purchasers, owner/occupiers and/or tenants who are waiting for construction but they have been held up with this delay."
Despite this, Hunt said Tauriko Business Estate was "excitingly vibrant".
He said about 18 industrial premises had sold off his waiting list without even going to the market.
"The demand is incredible. A lot of them are new investors, mostly local, getting out of residential and I find that exhilarating."
Tauranga City Council building services manager Steve Pearce said building consent application volumes had been high throughout the first half of 2021.
Pearce said the council received 506 applications in July compared with an average of 250 applications per month.
The jump in applications was likely to have been driven by builders and developers lodging consents before the new development contributions fee became effective, he said.
"As a result, we are expecting there to be some delays processing these applications over the coming month and are asking applicants to be patient."
The timeframe for processing building consent applications is 20 working days, so Pearce said most of the applications from July would not have been approved yet.
The increased volume of applications received over the past few months, particularly in July, puts pressure on the council's ability to process building consents within the legislative timeframes.
However, he said the vast majority of consents had continued to be done within the timeframes set out in the Building Act.
"We are working hard to get through these applications as quickly as possible, and have taken on additional contractors and sought support from other councils to keep any delays to a minimum."
A common cause of longer than normal processing times was the need for council staff to repeatedly request further information from applicants, he said.
"More than a third of applications processed between January and June 2021 required two or more requests for further information."
Pearce said waiving the increase in its entirety was unfortunately not an option as "we need to start recovering the costs of the development of infrastructure".
"To alleviate the impact on those having to pay the increased fee, Commissioners agreed instead to stagger the increase, instead of applying it in full on August 1."
Council's general manager of strategy and growth Christine Jones said the "significant" development contributions reflected the cost of delivering the infrastructure "our growing city needs".
If development contributions were not used then either the infrastructure could not be delivered, and everyday services that the community counts on would be impacted, or the costs would need to be funded from rates by all ratepayers.
Jones said the main reason for the increase was to fund the Waiāri Water Supply Scheme, which was expected to be operational by the end of 2022 with the capacity to supply about 30,000 households.
"Another factor in the increase to citywide development contributions this year is an increase in the expected costs of upgrades at the Te Maunga wastewater treatment plants."
Tauriko Business Estate director Bryce Donne said it was great to see strong continued demand for industrial land at Tauriko.
"This is from genuine business users and will translate quickly into employment, both during construction and the ultimate business user."
Donne said their focus remained on the delivery of the next infrastructure stage, including the connection of Kaweroa Drive (and Belk Road) to State Highway 29 via a new roundabout at Redwood Lane.
"This has significant safety and efficiency benefits for the transport network."
Priority One chief executive Nigel Tutt said Tauriko Business Estate was the second-largest industrial estate in the country and it was continuing to expand.
"So expect strong consents from this area to continue.
"Tauriko business estate is home to a wide range of businesses; from large ones moving to the area like Winstone Wallboards to a large number of local businesses expanding their operations."
Total citywide development contributions, including GST
For a new residential dwelling with three or more bedrooms:
1 August 2021 to 31 Jan 2022: $19,708
1 Feb 2022 onwards: $28,557
For business activities per 100m2 of gross floor area:
1 August 2021 to 31 Jan 2022: $5089
1 Feb 2022 onwards: $7077
Major consent applications issued value over $1m
54 Enterprise Drive
66 Oceanview Road
Construct three-storey, five-bedroom dwelling with attached double garage and retaining walls
520 Gloucester Road
Stage 2 of 2 - single storey commercial building consisting of eight tenancies
46 Girven Road
Construct three-storey commercial building
3 Ngarata Avenue
Construct two-storey, four-bedroom dwelling with attached triple garage and workshop. Install WD1 open front and right timber cavity insert outdoor solid fuel heater
71 Marine Parade
Stage Two Building Consent. Construct works above the top of the concrete slab. Three-level, four-bedroom dwelling with underground garaging - and inbuilt fire dept WD1 solid fuel heaters
22 Manawa Road
Construct three blocks of single-level multi-unit dwellings with attached single garages. Ten dwellings over blocks - B20 B21 and B22
242 Grenada Street
Villas 135-136 (Duplex) - two single level two-bedroom units with attached single garages Villas 137-138 (Duplex) - two single level two-bedroom units with attached
single garages Villas 141-142 (Duplex)
235 Matakokiri Drive
Erect three tenancy commercial workshops and office building
25 Kaweroa Drive
The building comprises a factory, office and amenity spaces spread over a footprint of approx 3900sqm with an occupant load of 100 occupants, excluding the area of
40 Kaweroa Drive
New Workshop and office
45 Kaweroa Drive
Construct two six-unit industrial buildings
1 Paerangi Place
Stage 2 - Foundations, structure, building envelope
17 Pillans Road
Construct two-storey, three-bedroom dwelling with attached double garage. And installation of pool fencing and Metro Wee Rad Leg free standing solid fuel heater.
12 Cathray Place
Construct two storey, four-bedroom dwelling with deck and attached triple garage $1,080,000
30 Te Auhi Way
Two-storey, three-bedroom dwelling with detached double garage and retaining walls $1,000,000
Source: Tauranga City Council