Troy Patchett: Head of Strategy at Subdivide Simplified on Auckland Council's decision which will see housing developers paying a greater share of infrastructure costs

A new policy’s been voted in by Auckland Council which will see housing developers pay a much greater share of future infrastructure costs.

The council’s looking to raise an extra six billion from developers to cover future infrastructure costs.

Suburbs such as Redhills and Tamaki will have to up to pay three times as much as they did before – more than 70-thousand per new build.

Head of strategy at Subdivide Simplified Troy Patchett talks to Heather du Plessis-Allan about the changes.

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Episode Transcript

Speaker 1 (00:00):
Together due for Cellen two is the text number. Standard
text fees apply. And now to Auckland. Housing developers and
Auckland are upset. They're going to have to fork out
tens of thousands of extra dollars per dwelling under some
new rules. Suburbs like Redhills and Tamaki will have to
pay seventy two thousand dollars per new build, which is
about as three times as much as they were paying before. Now,

(00:22):
Troy Patchett is the head of strategy at property Developers
Subdivide Simplified, and he's with us. Now, Hey, Troy, hello,
is that too much?

Speaker 2 (00:33):
Well, that's a roadblock. At the end of the day,
it will be the user that pays for then the property owner.
And that's unfortunately, because we're in a world of trying
to create more affordable housing than this is just a
real setback for that. So you could say a dollars
too much, but this is significantly a higher amount than
what we had anticipated.

Speaker 1 (00:52):
What were you anticipating?

Speaker 2 (00:54):
Well, interestingly enough, the Oakland Council did come out with
their first proposal, which was in some cases four to
five times the original amount, and due to the good
work of the SUNS group, which was headed by Kirsty
Merriman and Matthew Gilligan who put forward a case via
their KC that ultimately postponed that proposal and then forced

(01:15):
council to readdress it. So whilst we've got a lower
amount than what the original proposal was, it's still in
some cases two to three times so yeah, still quite
an astronomical amount. Pay well, it's effectively pays for the
infrastructure in the local area. And what I mean by
that is not just the roads, but the drainage and
things like that underground, but also the local libraries, the

(01:37):
parks and all those sorts of things. Now at the
moment that's based on like a ten year calculation. Auckland
councilor wanted to extend that out to a thirty year calculation.
But they've also got some other crazy methods going on
that have forced some of these fees which we didn't
think were their unreasonable. One that was part of our
case with the case to challenge it.

Speaker 1 (01:57):
Yeah, so do you accept that developed do need to
contribute to some of the infrastructures Just to question about how.

Speaker 2 (02:03):
Much most definitely yep, I mean a user pays right,
So the homeowner, which is either the landlord or the
home and own occupy, you know, get to the enjoyment
and the facilities in that local area. So most definitely
I think there should be some cost that that is
allocated for it. But the case that it needs to
be is that needs to be fair and reasonable. So

(02:24):
depending on what's in the local area and what's charged
need to match up.

Speaker 1 (02:28):
Can you explain to me whideer is that some suburbs
are per dwelling. It's a hell of a lot more
than others.

Speaker 2 (02:35):
Yeah, So what they're saying is that Auckland have pinpointed
some suburbs is higher intensification. Therefore it's going to have
a higher wear and tear on the local infrastructure. So
they've done some calculations around how many more houses they
think are going to be built in the area and
therefore the amount of people that are going to be there.
So that's why they've said lot this, some of these

(02:55):
facilities need to be upgraded sooner rather than later, and
there's going to be more where and tear in them.
So these areas are going to have higher rates than others,
which unfortunately is going to create what they're calling a
bit of a donut effect, so that developers are going
to I guess pull away from those areas and start
to focus on more of the areas where the development.

Speaker 1 (03:13):
Contribution have wees we little.

Speaker 2 (03:17):
Yeah, most definitely. And you know, as soon as the
table came out, everybody's just looking for the cheaper one, right,
so they're going, okay, so that might be the next
green light. But yeah, it's definitely going to be some
red zones, which I mean, ultimately, all of these developments
need funding, so there needs to be a minimum margin
that the developments need to achieve before they even get
out of the ground. The original development contributions killed that margin.

(03:42):
There was no margin left in it, and now the
new development contributions have been released are still going to
kill quite a few projects, but some may get the
green light, so it's still going to be an impact.
There's still going to be a slow down.

Speaker 1 (03:53):
Yeah all right, Hey Troy, thanks for talking as through appreciated.
That's Troy Patchett, head of strategy at Subdivide Simplified.

Speaker 2 (04:00):
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