On 15 November 2024, Property Council submitted to Auckland Council on their Draft Contributions Policy 2025.
Why this matters to our members
The Draft Policy proposes how Auckland Council will apply a 30-year funding and financing strategy to Development Contributions.
The Draft Policy applies to four Investment Priority Areas (“IPAs”): Mount Roskill, Māngere, Tāmaki, and the Inner Northwest (Red Hills, Westgate, and Whenuapai). Also, additional costs have been added to the Drury Investment Programme. Auckland Council has identified these areas for significant future growth.
Our view
Property Council opposes the Draft Policy and is alarmed at the proposed increases in the average DC per household (up to 289 percent). This will directly reduce housing affordability, limit intensification, and decrease the number of homes developed, including first-time buyer homes and those built by social and affordable providers.
Also, due to concerns around complexity, uncertainty, accuracy, fairness, inequity, and transparency, we have serious reservations about Auckland Council’s 30-year funding and financing model.
At a high level, we recommended that Auckland Council:
- Collaborate with the private sector to better understand the implications of DC increases on the housing system and housing prices in particular;
- Does not increase development contributions by the amount proposed and instead reduces the rate of increase;
- Pause the DC policy and review the schedule of assets with the private sector. Once a pause and review are complete, phase in any changes to development contributions over a three-year period;
- Does not adopt a 30-year infrastructure funding and financing strategy using DCs. Instead, Auckland Council should create a 30-year strategic vision, with funding and financing structured in 10-year increments;
- Seek to incorporate funding from Crown Infrastructure Partners (soon to be the National Infrastructure Agency) under the Infrastructure Funding and Financing framework;
- Consider shifting some of the burden for growth onto existing ratepayers who also benefit from new and upgraded amenities and a better functioning urban environment;
- Consider targeted rates to defer and shift some of the payment for growth from developers to subsequent owners of new housing;
- Introduce independent auditing of its costing assumptions and plans for infrastructure delivery. In particular, more detailed costings for stormwater provisioning are required;
- Collaborate closely with developers already undertaking infrastructure investment in the IPAs to avoid the possibility of overcharging;
- Ringfence DCs paid in an area to ensure they are used in that area; and
- Continued engagement with the Property Council to arrive at a suitable solution to funding and financing Auckland’s future infrastructure needs.