More developers attack Auckland levies plan

Developers could defer projects because of the demand for higher development contributions. Picture / Paul Estcourt

Property developers are aghast at plans by two more public bodies joining local councils and imposing levies for growth-related infrastructure.

The Auckland Regional Council and Transit New Zealand are considering development contributions to help pay for transport costs arising from growth.

Many of the country's wealthiest property developers are already complaining at plans by the Auckland City Council to raise development levies by 20 per cent this year for community facilities, parks, transport and stormwater in Auckland City.

A group of property developers is taking the North Shore City Council to the High Court over the fairness of its development contributions.

Property Council of New Zealand national director Connal Townsend yesterday told the Auckland City Council that his members were "deeply concerned" at the prospect of ARC development contributions and Transit development contributions on top of Auckland City development contributions.

Mr Townsend said it was immoral and highly risky for councils to use development contributions as an alternative revenue source because it would have a negative impact on housing affordability.

"Property developers don't pay development contributions. They pass [them] on as a cost," said Mr Townsend.

Plans by Auckland City to increase development contributions from $20 million to $24 million a year to pay for an estimated $280 million of growth-related facilities over the next decade drew an angry response from a number of property developers at a public hearing on the council's draft 10-year plan.

Dean Shields, a development executive at retail giant Westfield, said the company's plans to invest $430 million at its shopping centres in Auckland City over the next five years and a $200 million mixed-use development at the Downtown Centre in the central city could be "deferred" by higher development contributions.

Development contributions were provided for in the 2002 Local Government Act to help councils to pay for growth-related costs. Councils cannot levy developers for non-growth-related infrastructure or operating costs.

Transit acting regional manager Peter Spies said the days of private developers building something by a motorway and expecting Transit to improve the road at no cost were over.

"If there are benefits accruing to a private developer we would expect them to put their hands in their pockets and make an equitable contribution."

Transit has been developing a development contribution policy over the past year to 18 months using a "case-by-case" funding formula. Last month, it began negotiations with developers and the Papakura District Council for a multimillion-dollar upgrade on Papakura's main motorway exchange for about 1400 new homes on the Hingaia Peninsula.

The ARC is looking at seeking the power to introduce development contributions under the Local Government Act.

At the moment regional councils cannot levy development contributions.