Hot Seats & Hard Questions: Inside Property Council’s Annual Plan Oral Submissions

Unsurprisingly, rates increases dominated the conversation. Across the country, businesses are feeling the squeeze as the cost of operating continues to climb and councils know it. But there was also a noticeable shift in tone this year. Rather than simply debating how much rates should rise, many councillors were asking a bigger question: what are the alternatives?

During the hearings, funding and financing mechanisms became a recurring topic of discussion, with councillors increasingly conscious that local government balance sheets are under pressure and that looming rate caps may force councils to get more creative. There’s a risk this becomes “death by a thousand cuts” as a growing collection of targeted charges, levies and fees slowly pile onto development costs. But done well, it could also signal a more transparent user-pays system, where infrastructure costs are better aligned with those who directly benefit.

What became equally clear throughout these conversations is that there remains a significant knowledge gap around development feasibility. Too often, the cumulative impact of rates, development contributions, consenting costs and financing pressures is underestimated, despite the reality that compounding costs can quickly push projects from viable to unworkable. Several discussions also highlighted the need for greater understanding of how tools like Special Purpose Vehicles (SPVs) and Public-Private Partnerships (PPPs) work, how accessible these tools are, and the role they can play in unlocking infrastructure without placing the entire burden on ratepayers upfront.

Another hot topic was the vacant site differential. Councils are clearly frustrated by empty or underutilised sites sitting idle in key urban areas, and many are looking for ways to get development moving. But while punitive tools like vacant site differentials may appear attractive on paper, they risk oversimplifying a far more complex issue.

From Property Council’s perspective, vacant sites are often a symptom, not the root cause. Feasibility constraints, infrastructure delays, financing challenges, market uncertainty and planning barriers can all stall development. Before reaching for the rating hammer, councils should first open the lines of communication with the developers and property owners directly affected. In many cases, a constructive conversation may reveal solutions far more effective than another line on the rates bill.

And to local government’s credit, we are starting to see some promising communication channels emerge. In Auckland, stemming from Auckland Council’s Urban Development Office, the Mayoral Office has committed to a developers’ forum where council front up on policy progress, answer the tough questions and report back on outcomes from previous discussions. Wellington City Council has proposed a similar Urban Development Office in this year’s Annual Plan, which Property Council is keen to support. Meanwhile in Hamilton, councillors are looking at bringing developers together to better understand how consenting outcomes can be streamlined and improved. It’s a strong signal that some councils are recognising the value of early engagement and that better conversations often lead to better cities.