Ratepayers get share of growth profits

Auckland's city councils are raking in millions of dollars from new growth levies on developers.

The North Shore City Council leads in the collection of developer contributions brought in 12 months ago, with $7 million.

Waitakere has banked more than $2 million and Manukau City expects up to $3 million as projects proceed.

Auckland City introduced its developer contributions policy only last month but expects it will gather an additional $5 million a year.

"This is recovering the costs of growth so ratepayers won't have to pay for developers' profits," said Waitakere City finance committee chairman Janet Clews.

The councils' power to demand contributions came from a change to the Local Government Act.

North Shore Deputy Mayor Dianne Hale said the council wished it had that power during the strong growth of the past six years but was catching up as the city filled out.

Contributions were nearly $2 million over budget because of a higher than expected level of development activity.

Developer contributions will help pay for reserves, transport, water supply, wastewater collection and treatment, stormwater collection and management and community facilities such as libraries, leisure and community centres.

But the levies have pushed up housing development costs.

In the medium-density housing hotspots of Greenhithe and Oteha Valley, the developer contribution on a 350sq m section is $7800 and $7000 plus GST respectively.

With such high stakes, developers and other people subdividing or adding on to their homes have challenged council assessments of what they should pay.

The North Shore City Council has so far allowed 87 remissions of contributions bills totalling $6.4 million, said asset planning manager Graham Nielsen.

That included $5.6 million in land-use consent fees for a Takapuna retirement village, which had suffered council delays in processing its application.

Waitakere City has remitted $46,500 in reviewing 11 cases.

The Rodney District Council was one of the country's first local authorities to consider making developers pay towards growth.

But it brought in charges only on April 1 after an expensive six-year court battle with a major developers group.

Council executive officer Ray Ginnever said the council was still working on its part of the deal - to give developers an accurate assessment of what they had to pay towards council services projects for the next three to four years.

Development fees levied by councils

* North Shore City: $7m

* Waitakere: $2m

* Manukau City: $3m (expected)

* Auckland City: $5m (expected)