Development contributions help recover the costs of infrastructure we provide to support growth in Auckland.
We charge development contributions if a new development causes (or will benefit from) new or upgraded infrastructure for:
- transport
- parks
- sports grounds
- drainage and stormwater systems
- community facilities to support growth.
This infrastructure allows houses to be built now, as well as in the future. It also includes regional investments necessary to support communities in a growing city.
Charging development contributions enables us to recover costs from those who cause the need for, or will benefit from, the infrastructure Auckland needs to support the rapidly growing city. If we cannot recover a share of these costs from developers, the full cost will need to be recovered from ratepayers.
About our Contributions Policy
We have had a Contributions Policy for many years.
The Contributions policy is regularly updated to take into account:
- updated projections of growth
- revision to our capital expenditure plans
- any relevant policy changes.
The current Contributions Policy became effective from 1 January 2019.
What we are proposing
We are proposing a new Contributions Policy, to take effect from 10 January 2022.
Updating for new information in the Recovery Budget
The proposed changes result from updates to the growth component of capital expenditure in the 10-year budget. The development contributions price will rise in some areas and fall in others depending on the level of investment in each area. Overall, the weighted average development contributions price is falling as the pace of growth is outpacing investment.
Including projects beyond ten years
We propose gradually updating the Contributions Policy to include the infrastructure required to support growth in the infrastructure priority areas over 30 years.
For the Contributions Policy 2021, we are proposing to start with Drury. Drury is the area where we have the best information to implement the changes. Others will follow as work progresses.
We have included plans for $400 million on investment in local and arterial roads and parks in the Drury area in the next ten years and a further $2.1 billion to be delivered beyond 2031. Under the new draft policy, development contributions will rise from between $11,000 to $18,300 to $84,900. This ensures developers in Drury pay a fair share of costs. The alternative is for these costs to be met by ratepayers.
Development contributions and house prices
National and international evidence shows that increased contributions fees do not cause house prices to rise over time.
House prices are determined by the supply and demand for houses not the cost of land and building.
Over time the Development Contribution costs are deducted from the price paid for the land. Developers will adjust the price they are prepared to pay for the land, reflecting the price they can sell a house for fewer construction costs, development contributions, other costs and a margin for profit.
What increasing development contributions will do
Our research indicates that increasing development contribution charges will:
- better align these costs with the actual cost of infrastructure
- increase the certainty that infrastructure will be delivered
- ensures ratepayers don't have to bear all the costs of growth
- encourage more accurate pricing of land purchases for development to reflect future development contribution prices
- impact developers who have paid for land based on current development contribution charges
Payment timing
We propose that payment of contributions required at building consent are payable at the grant of the consent.
This is earlier than currently required. COVID-19 significantly impacted the council’s finances. Requiring contributions to be paid earlier will mean the council can recover the cost of infrastructure sooner.
Development contributions and Māori land
We are proposing to:
- continue to support the development of marae and papakāinga and Māori housing on Māori land through grants available through the Cultural Initiatives Fund
- exempt not-for-profit development on Māori land from reserve contributions
- retain the current payment timing for contributions payable at building consent for non-commercial development on Māori land, if changes are otherwise made to payment timing.
What we want your feedback on
We would like to know what you think about the proposed changes to the Development Contributions Policy.
When you can have your say
You can have your say from 20 September to 5 pm on 17 October 2021.
Contributions to this consultation are closed for evaluation and review. You can take a look at the right bar on the Submissions Review to see the findings.
Contributions Policy 2022
The current Development Contributions Policy became effective from January 2019.
Following public consultation which took place between 20 September and 17 October, a new Development Contributions Policy has been adopted. This new policy will take effect from January 2022.
You can find the latest agendas and committee meeting minutes relating to the new policy on Infocouncil.
The policy has been updated as follows:
- To support growth by collecting contributions to fund infrastructure investment within the Investment Priority Areas (IPAs) beyond 2031. The IPAs are the Inner Northwest, CRL stations and Auckland Housing Programme areas including Tāmaki, Mangere, Northcote, Oranga, and Mt Roskill.
- To implement this in stages over the next 15 months.
- To defer the inclusion of infrastructure investment beyond 2031 for Drury in the policy until June 2022 to allow for the provision of more information to developers and more time for them to make further submissions with the benefit of this information.
- To retain the current payment timing (six to twelve months after the grant of building consent) for DCs due at building consent, rather than the proposed much earlier time of when a building consent is granted.
- To support the development of Māori land by way of grants through the Cultural Initiatives Fund and exempting not-for-profit development on Māori land from contributions for reserves.
