Auckland Council has defended a fee rate hike which developers say could exceed 500 per cent.

Developers will only be levied $3.3 billion of a $26b 10-year Auckland infrastructure spend and must pay because their projects stretch the system, the council has indicated.

Andrew Duncan, Auckland Council financial policy manager, said the council must increase developer fees to fund the huge infrastructure investment but developers yesterday decried the fee hike, saying it was unfair.

Read more: Developers decry planned Auckland Council fee rise of up to 500pc

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Duncan said the council would only recover $3.3b of that $26b from development contributions for the huge investment needed in the city in the next 10 years and developers should pay because their projects cost the city so much in new infrastructure.

"Retail and commercial developments place a substantially higher demand on transport infrastructure than what is reflected in the current policy. This is being adjusted in the proposed 2019 policy," Duncan said.

"The council will deliver $26 billion in capital investment over the ten years of the 10-Year Budget. Of this, $3.3 billion will be recovered from development contributions, with $2.7 billion to be collected within the 10 years of the 10-Year Budget," Duncan said.

But developers said the fee hike could kill their planned projects resulting in new residential-only communities with no shops or offices, flying in the face of the council's live-work-play integrated community policy aimed at creating less congestion and putting less strain on the city's stretched motorway, reserves, water and sewage systems.

Connal Townsend, Property Council chief executive, said developers might re-think projects' feasibility and he cited examples of how the fee increases would affect buildings across the city.


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"At 10-26 Jellicoe St, it would mean a 578 per cent increase in development contributions from 2015 to 2019. At Westgate, it would mean a 469 per cent increase in fees. At 286 Mt Wellington Highway, it would be a 460 per cent increase of which 397 per cent would be in the last 12 months alone," Townsend said, comparing the council's proposed [but never enacted] 2018 draft with the latest 2019 draft.

At another Mt Wellington Highway project, fees would rise 460 per cent. On Great North Rd, a project's fees would rise 317 per cent, he said.

Townsend said the proposed system was unfair. Photo/Jason Oxenham
Townsend said the proposed system was unfair. Photo/Jason Oxenham

"We do want infrastructure funded and the development community is happy to pay their fair share. But it's not been demonstrated to us that it's a fair allocation. This is enough to make developers seriously reconsider projects," Townsend said.

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"It's a bit of a road smash. They're penalising industry, retail and commerce. It's unfair and a perverse and an unintended consequence is that it could dampen down urban development and might result in the creation of housing but without any supporting infrastructure around jobs or retail. This could have a chilling effect," Townsend said.

Submissions on the draft development contribution policy must be in by Thursday.