Auckland is currently in the midst of a massive construction boom with permits reaching a new all-time high in August with just under 20,000 issued in the past 12 months.
Most of these permits are in the existing urban area, but as Auckland’s population has grown so has its urban footprint. This is currently expected to continue to occur in the future, with around 30-40% of Auckland’s growth expected to occur in “greenfield” areas. In total, there could be up to 130,000 new homes added to these areas.
Yet we also know that this growth is leading to some of the worst outcomes for our city. For example, it contributes to longer journeys to access work, education, recreation and other amenities, leading to increased emissions and congestion. There are also a lot of other issues – some of them were perfectly explained by urban developer Mark Todd of Ockham.
Since 2000, New Zealand has lost a third of all its market garden land. Once buried in concrete, it will never come back. Death by a thousand diggers.
The numbers are staggering – a thousand hectares a year, a hundred thousand trees, a million displaced birds, countless lizards and insects. Wetlands are drained, watercourses are channeled. In their place are dozens of new suburbs you’ve probably never heard of. If you can place more than three of the following on the map, you are the undisputed king of sprawl bingo.
Hingaia, Waiake, Pahurehure, Red Hill, Rose Hill, Pinehill, Redoubt South, Wattle Downs, Northcross, Randwick Park, Clover Park, Totara Park, Totara Heights, Fairview Heights, Lucas Heights, Palm Heights (note: all terrain over five meters above sea level automatically earns the nickname “Heights” in the dictionary of urban sprawl).
We say to ourselves that it is inevitable, that it is the price of progress. We endure more and more traffic jams – more lanes, more cars – and arrive late and exhausted, “Auckland’s bloody traffic,” our shared original greeting with rolled eyes and a contrite smile.
We falsify or rationalize or simply ignore the cost of our urban sprawl – the billions of dollars for our roads and highways, the billions of hours lost behind the wheel, the billions of tonnes of carbon emitted. And then there are the 50,000 hectares of nature that have been sliced and divided into subdivisions. Like the apocryphal frog in the pot, we continue to adjust to the new normal, not realizing what we’ve lost until it’s gone forever.
It’s a model of development replicated in auto-centric countries around the world, driven by a frontier mentality and supported by the madness that our horizons are limitless and we can just get out of trouble. This has never been less true than now.
Farming in this way is also costly as the council has to pay for the infrastructure to support it, infrastructure such as transport links, parks, three water bodies and community facilities. In 2019, the estimated cost for transportation infrastructure alone was expected to exceed $ 10 billion, with the actual figure likely rising to over $ 100,000 per new home.
So it’s no surprise that the sprawling industrial complex is collapsing in places like Drury to overtake the councils’ plans to develop these areas when you hear that they are only contributing between $ 11,000 and $ 18,300 per unit. . In other words, as taxpayers, we heavily subsidize urban sprawl, which in turn helps make our city less livable.
So it’s interesting to see that the council is considering changing the amounts it charges for development contributions and that the first cab in the row is Drury.
Charging Development Contributions allows us to recover costs from those who need or will benefit from the infrastructure Auckland needs to support the rapidly growing city. If we cannot recover some of these costs from the promoters, the full cost will have to be recovered from the taxpayers.
What we offer
We are proposing a new contribution policy, which will take effect on January 10, 2022.
Update for new information in the recovery budget
The proposed changes result from the update of the growth component of capital expenditure in the ten-year budget. The price of development contributions will rise in some areas and fall in others depending on the level of investment in each area. Overall, the weighted average price of development contributions decreases as the rate of growth exceeds investment.
Including projects beyond ten years
We propose to gradually update the Policy on Contributions to include the infrastructure necessary to support growth in priority infrastructure areas over 30 years.
For the 2021 Contribution Policy, we suggest starting with Drury. Drury is where we have the best information to implement the changes. Others will follow as the work progresses.
We have included plans to invest $ 400 million in roads and local and arterial parks in the Drury region over the next ten years and an additional $ 2.1 billion to be provided beyond 2031. In under the new policy project, development contributions will increase from $ 11,000 to $ 18,300 to $ 84,900. This ensures that Drury developers pay a fair share of the costs. The alternative is for these costs to be borne by the taxpayers.
What will increased development contributions do
Our research indicates that the increase in development contribution costs:
- better align these costs with the real cost of the infrastructure
- increase the certainty that the infrastructure will be delivered
- ensures that taxpayers do not have to bear all the costs of growth
- encourage more precise pricing of land purchases for development to reflect future prices of development contributions
- impact promoters who paid for the land based on current development contribution fees
They are also seeking to change the policy so that these development contributions are made at the time consent is granted.
Hopelessly, sprawl proponents are not happy, claiming it is unfair and would endanger developments. While this may not be the direct intention of the board, which focuses more on balancing its budgets, it could well be a positive side effect. It has long been suggested that one of the best ways to curb growth in the outskirts and encourage more development within the existing urban area is to ensure that developers pay the full cost of developing new land. While this change does not yet represent the full cost, it is much closer than it has been before and potentially helps shift the balance and makes redevelopment of existing urban sites more attractive.
In addition, the changes that are expected to result from the national urban development policy statement, if the council implements it properly, will serve to open up more urban land for redevelopment.
The advice is just getting started with Drury, but it looks like these kinds of changes will be seen elsewhere as well. The impact this might have on developments in the existing urban area is not clear, but it should be noted that while new or improved infrastructure and / or services are needed to support them, they are also likely to benefit people. existing taxpayers.
As noted above, the council is focusing on this as a way to balance its budget, but if it ends up slowing the rate of our urban spread, this could become one of the most important and most important policy changes. more positive in recent times.
Finally, it should also be noted that the council does not believe this decision will have an impact on house prices.
Development contributions and housing prices
National and international evidence shows that increasing membership fees do not lead to higher house prices over time.
Housing prices are determined by housing supply and demand, not the cost of land and construction.
Over time, the costs of the development contribution are deducted from the price paid for the land. Developers will adjust the price they are willing to pay for the land, reflecting the price they can sell a house for less construction costs, development contributions, other costs, and a profit margin.
The council is currently consulting on the proposal and submissions are open until October 17.