Whanganui District Council should be collecting more money from developers, chief executive David Langford says. Photo / NZME
Whanganui District Council should be collecting more money from developers, chief executive David Langford says. Photo / NZME
Millions of dollars to help pay for Whanganui’s growth are being “left on the table” with ratepayers picking up the tab instead.
But Whanganui District Council is now considering ways to get developers to pay a bigger share.
Councils can collect money from developers in the form of development contributionsto help fund the extra infrastructure those developments require, such as new roads, pathways, pipes and parks.
But Whanganui’s council has collected just $18,000 in development contributions over the past year and about $100,000 the year before - far less than other councils collect, according to chief executive David Langford.
“It is really on the low side,” he told councillors at a planning workshop this week.
“Even if we get $100,000 a year [over the 10 years of the long-term plan] - that’s only a million bucks.”
Langford said a lot of other councils charged in the range of $15,000 to $25,000 per new section.
If Whanganui charged $15,000 per section on the 200-250 sections a year Whanganui needs to meet the growth forecasts over the next decade, it would equate to $35-$40 million.
“That would be paying for our infrastructure instead of the general ratepayer paying for it,” Langford said.
“$15,000 might sound a lot [but] in the context of the build cost for a new dwelling, it’s less than half a per cent, probably closer to a quarter of a per cent of the cost.
“It’s easily affordable without driving up the cost of residential development but it’s hugely beneficial to the general ratepayer and it’s one of the levers we’ve got to pull to bring in some additional revenue into council without just constantly increasing rates.”
The council is reviewing its development contributions policy which will go out for consultation as part of next year’s long-term plan.
Councillor Rob Vinsen said the council needed to consider whether there was room to increase development charges.
“It seems to me that we are undercooking that area of income into this council.”
Langford said Vinsen was “absolutely right” and that was the reason the policy was being reviewed.
“We’re leaving a lot of money on the table with the development community and the general ratepayer is picking up the bill,” Langford said.
Whanganui District Council chief executive David Langford.
Councillor Kate Joblin didn’t disagree but said: “If we want to promote affordable housing we need to be quite thoughtful about how we do this. Because it does push up the cost of building. We need to be nuanced and aware of the outcomes we want.”
The development contributions policy currently applies to the Springvale and North West growth areas which in 2021 was expected to have just under 900 new dwellings over a 10-15 year period.
The policy could be updated to include a broader range of development and listed in the long-term plan.
“Any development in the district can be and should be paying its fair share of the growth,” Langford said.
Council policy manager Elise Broadbent said the policy would undergo a full review with consultation with a draft policy ready by early 2024 and implemented as part of the long-term plan.
She said it was important to provide certainty to the sector.
Meanwhile, Broadbent said if water infrastructure was taken off the council’s hands in the future, water-related development charges would be handed to the water services entity.
Zaryd Wilson has been a journalist covering the lower North Island for more than a decade. He joined the Whanganui Chronicle as a reporter in 2014 and has been editor since 2021.
