Delay paying subdivision levies

03:06, Feb 13 2013

The Marlborough District Council is reviewing its development levies and may delay charging developers of small subdivisions until the sections are sold.

The Government earlier this week published a discussion document looking at changes to the way councils charged for new sections and other developments as part of its work on housing affordability and local government reform.

Housing Minister Nick Smith said section prices had more than doubled in the past decade and a significant factor had been the sharp rise in the development contributions charged by councils.

"The average [development] charge nationally has increased from $3000 per section to $14,000 per section over the past decade, an increase of 360 per cent, and can be as high as $64,000 per section.

"These costs need to be contained if more Kiwi families are going to be able to afford their own home."

Local Government Minister Chris Tremain said development contributions were needed to enable councils to provide the necessary infrastructure to support new developments, but costs needed to be fair and well justified.


Marlborough District Council chief executive Andrew Besley said the Government's discussion paper raised questions about the timing of the collection of development levies.

The council was one of the few which did not require larger developers (10 or more sections) to pay their levies until sections were sold.

"The council is reviewing whether this could be extended to smaller developments, so long as an approved security is provided.

"As part of the Annual Plan 2013-14 review, the council is also considering whether its model for development contributions should be readjusted for ‘in-fill developments' in order to encourage this kind of development in Blenheim's urban area."

Both matters would go to the council's community and financial planning committee for discussion.

Mr Besley said there were always costs in creating new sections or subdivisions through the supporting infrastructure like stormwater drains and sewerage pipes and reserves.

"Someone has to pay these costs," he said.

"If developers do not pay a development contribution, then development costs have to be met in some other way; that means either the ratepayers or the taxpayers."

If the Government wanted councils to meet more of the development costs, Mr Besley said, then it was really saying ratepayers, not the developers or property buyers, should be paying for growth.

"That would mean a rate increase. I doubt Marlborough ratepayers would be happy about that."

Marlborough's development charges were about average compared with other parts of the country, he said.

"However, median and average figures are not very helpful in this discussion as districts which are not experiencing growth do not have any need for development contributions; areas which aren't growing don't have the same need to build new infrastructure or create new public facilities as districts where the population is rising."

The Marlborough Express