Policy change likely to be costly for council

Tasman District Council will begin consultation with real estate agents, developers and home suppliers over its revised "once paid always paid" development contributions policy from tomorrow.

However, while the move may satisfy the building industry and its sellers it has been estimated it could cost the council about $1.45 million annually in lost development contributions, or $3.5m over the life of the current long-term plan.

The decision by councillors at yesterday's full council meeting is the latest step in the council's move away from its controversial "top-up" method of paying development contributions, which has caused angst to the industry and section buyers.

The industry has argued that the council's current method of collecting development contributions at the time of subdivision on the issuing of a building consent, and again on the connection of services, was confusing, cost sales and unfairly taxed builders.

The level of the second and third contributions could vary hugely because they were based on the assessed amount of growth funding required by the council to meet the planned cost of growth at the time, it said.

The issue came to a head in July when councillors met the building and housing industry after the council revised its development contribution rules and removed a discount that applied to the first dwelling on a site. Deputy mayor Tim King said encouraging development was essential in times of recession. "And it may be the added growth goes towards offsetting the cost of this."

He said the change would see the council having to become more specific about its infrastructure development and only spend on providing roading and services in areas where it was sure to get a faster return.

"I think this will drive us to be more efficient and effective and balance our own timing of development," he said.

Submissions to the special consultation procedure close on January 14.

They will be heard on January 24 and be considered by the council in early February, when it was expected the decision would come into effect.

The Nelson Mail