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NZ High council fees blamed for pushing costs too far

Property Here - Tuesday, July 02, 2013

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Aucklanders subdividing their land have decried big infrastructure and development fees, with one Flat Bush resident charged more than $500,000.

That was the fee for development and contribution levies to subdivide a small parcel of land and he said affordable housing could not be developed due to the high cost of providing services.

The criticism came after the NZ Initiative reportĀ Priced Out - How New Zealand Lost its Housing Affordability, which blames big infrastructure and local authority charges in part for the housing affordability crisis.

But Auckland Council says it collects money under the Local Government Act 2002 for community and network infrastructure needed as a result of development projects.

The Flat Bush owner subdivided his property into 15 sections but fears being named because he said Auckland Council was yet to issue titles for the new subdivision.

He bought a 1.9ha section two decades ago to escape the city, saying he wanted a peaceful life out of Auckland. But he was only just on the outskirts.

Within a few years, the metropolitan urban limits were expanded, his land was zoned residential and now carries a $2.5 million valuation but he said it was worth far more than that.

Houses are yet to be built on the site where a $30,000 resource consent fee was charged.

"The land for roads and footpaths also has to be vested to council at zero cost. Council rejected my plan for a single road and required a second. The public needs to know how damaging councils are to ordinary folk," he said.

Evan Davis, Todd Property chief executive, said his company had to spend so much on roading, a new pump station, settlement ponds and pipelines at its 160ha Long Bay development on Auckland's northern outskirts that cheap housing was never an option. It took 13 years before the first house could rise.

Linda Mee said she had just finished a Remuera subdivision, a relocation and a new build on a site in Auckland where she paid $12,000 for an electricity connection "when the line was 1m from my boundary" but she eventually bargained that down to $5500 which she said was "still daylight robbery". The water connection cost an extra $5200, she said.

An independent contractor dug a trench inside the property and laid 41m of electricity cabling and ducting for only $1800, she said.

Auckland Council said development contributions on new houses and apartments, non-residential development, subdivisions, and on some changes of land use pays for public infrastructure needed to meet the additional demand from growth, "including network infrastructure such as stormwater and transport, open space reserves and community facilities".

The Property Council is also up in arms against big infrastructure fees and said residential ratepayers were being favoured over commercial investors.

"This policy distortion has come about for three reasons: an inability to define the core role and function of local government so as to enable some territorial authorities to make better funding decisions, a lack of legal accountability for the funding and policy decisions that are applied, and a failure to pursue planning and accounting practices that reflect best practice," the council said.