Tauranga retirement homes call for discount from planned 15pc development fee hike

Tauranga City Council is considering a 15 per cent increase in development contribution fees but retirement villages say they should pay less. Photo / George Novak

A consultant has been appointed to investigate whether Tauranga retirement villages should pay the same council fees as everyone else.

Tauranga City Council has hired the consultant to review its development contributions policy in relation to retirement villages. The consultant is expected to explore whether a specific charging category, to better reflect low-demand profiles such as some retirement homes, should be adopted.

The issue was raised at a council meeting last week as part of submissions on the council's Draft Development Contribution Policy and Annual Plan 2022/23. The draft policy proposes a 15 per cent increase in citywide development contributions for residential developments, to help pay for new community facilities.

Such an increase could take the fee for a three-bedroom house in Tauranga from $28,557 to $32,754 from July 1. Such contributions are typically passed on to the buyer.

Development contributions are paid to the council when a person develops property, including subdivisions, new builds, expansions, relocations and new connections to the council's water or wastewater networks.

However, it was proposed that retirement villages had minimal demand on council infrastructure such as water and roads so should pay less.

In a report to the council, senior adviser for growth funding Ana Blackwood said the retirement village submissions reiterated concerns raised previously but not been acted on.

Retirement Villages Association executive director John Collyns. Photo / George Novak

"We have requested a report from an external consultant in relation to the demand profiles of retirement village units compared to other development typologies as well as other submission points raised," Blackwood said.

The report had been asked for "on an urgent basis" but it was unlikely to be available in time to amend the final policy, due for adoption next month. However, any submitter intending to apply for consent in the upcoming financial year could be considered for a special consideration waiver, she said.

Summerset Group Holdings, Retirement Villages Association, and Ryman Healthcare requested a specific charging category to reflect low demand from retirement villages.

They also asked for a change of charging approach so development contribution fees could be locked in under land consent but paid before building consent for each stage.

The retirement entities also sought additional information for special assessment provisions in the policy.

Submissions from local landowners and developers were also received.

Retirement Village Association executive director John Collyns told the Bay of Plenty Times such villages were markedly different to standard residential developments.

"On average, they have 1.3 people per dwelling as opposed to 2.6 in a conventional dwelling. The land use is more efficient as we can get more dwellings on the land and residents, generally speaking, are quite a lot older. Therefore the use of the transport system is a fraction of the standard dwellings."

Tauranga City commissioner Stephen Selwood. Photo / Andrew Warner

Collyns also said many villages were mostly self-contained, offering hobby spaces such as bowls, swimming pools and cafes - creating a minimal drain on council services.

All council costs were typically reflected in a retirement village's unit price, meaning residents would be hit by the increased fees.

Collyns suggested Tauranga consider Auckland Council's approach to retirement villages: the northern city's policy shows that although there were no specific discounts for types of developments, fees were determined on the amount of demand particular development types placed on council infrastructure.

The policy also showed that although a retirement unit's demand on stormwater was equivalent to one Household Unit Equivalent (HUE), it was equivalent to 0.3 for transport and 0.1 on all other activities.

However, in the meeting, commissioner Stephen Selwood noted that reducing fees for a specific group could encourage others to push the low-user argument to say they shouldn't pay.

"Fundamentally, the concept of shared rates payment and taxes is that we all carry a share of the burden and if we give exemptions to everyone we would be in a sad state," Selwood said.

"To me, there has to be a fairly persuasive and convincing rationale as to why some dispensation might be made."

Council general manager of strategy and growth Christine Jones said: "That's what we are seeking is the evidence which will be volumetric in terms of water, traffic counts, etc".

Commission chairwoman Anne Tolley said the proposed 15 per cent increase was "quite a significant change".

"But again, it's all part of making sure that everyone is paying their fair share and there's no doubt growth means you have to increase your community facilities to take account of the extra number of people.

"That hasn't happened in the past. It's only right that the development community should be picking up their fair share of that."