The Government has announced a series of changes that intend on making it easier for local councils to finance infrastructure around new housing developments.
Currently ratepayers are picking up the tab for sewage lines, local streets, and water. New changes are set to ensure that developers are paying their fair share.
Infrastructure Minister Chris Bishop joins the show.
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Speaker 1 (00:00):
Bryan Bridge.
Speaker 2 (00:01):
Government has announced a rafter changes. It should make it
easier for local councils to finance infrastructure around new housing developments.
Currently rate payers are left picking up the tab for
sewage lines, local streets and water. Changes will in theory
ensure that developers are paying their fair share. Christ Bishops
the Infrastructure Minister. He's announced it today, minister.
Speaker 1 (00:20):
Welcome, good afternoon.
Speaker 2 (00:23):
So at the moment, what is the shortfall at the
moment between what the developers are paying to the councils
and what the councils are having to make up.
Speaker 1 (00:32):
It will vary from development to development. Just give you
an example I talked about in the speech today at
at Drewy. The Auckland Council's short three hundred and thirty
million dollars because there the development going on out there
and the way the rules work is complicated. But the
way the rules work is they could only charge development
contributions on a very small amount of the development and
they're short about three thirty million, So all of that's
(00:53):
being paid for by every other ratepayer when in reality
it should be falling on the developers and also the
benefities of the new housing and that's why we're changing
the system today to move to a more flexible levy
based system.
Speaker 2 (01:07):
What about places like the one that you're describing where
there's already a shortfall. There's a place out west we've
found around a few developers today out Wes whether it's
so bad they haven't planned obviously, haven't planned for this,
and they having to use wagons in some areas to
remove waste. I mean, what do you do about those situations?
Speaker 1 (01:26):
Well, that's precisely the problem we're trying to solve, right,
So that the funding system for infrastructure for housing is broken,
you've got under recovery of the growth charges. We're not
planning ahead far enough when it comes to wastewater and
storm water, for example, and that's because the system underlying
it in the Local Government Act is broken. So what
we're doing is changing it to a much more flexible system.
(01:47):
We're giving councils the ability to recover for all of
the growth charges that come from new housing and make
sure that when a development turns up that the council
can say, okay, well you can build there, but the
charge is for your wastewater? Is this the charge for
your stormwater? Is this? The charge for the community infrastructure,
your parks and the beautification is this. The charge for
(02:07):
the local streets is this. Everyone knows where they stand.
The council knows how much they'll get, The developer knows
how much it will cost. They can make their decisions
around where and what they build based on that, and
so there's a much more predictable transparency everybody.
Speaker 2 (02:21):
But we know the developer is not going to pay
this and sales. They'll pass it on to the home
buyers potentially first home buyers. Do you know how much
it might push house prices up by well?
Speaker 1 (02:29):
And actually what we're trying to do is lower house
prices over time because the problem at the moment is
we've got a shortage of land right because we zone
land in a very restrictive way, and then we don't
sort out the infrastructure funding that I'm talking about so
that the land can actually be developed. So what's happened
over in Auckland in particular over the last.
Speaker 2 (02:47):
I can see yeah, long land, I can see the
long term benefit that you're talking about, But in the
short term you will have I mean, if you're a
developer and you were going to build something that the
Council was going to pay three hundred million dollars for
and now they're not. That's going to cost you, right,
it will.
Speaker 1 (03:01):
Go backwards into the land price, so it will be
reflected in prices that people are willing to pay for land.
And so our aim is to actually drive down the
cost of land. And the price of land. Land is
so expensive because there's the shortage of it. But we
don't have a shortage of land. We have a shortage
of land that can actually be developed. That's the problem.
So we're fixing that with the ANNOUNCEMCE today.
Speaker 2 (03:20):
Chris Bishop, thanks your time the Infrastructure Minster Chris Bishop.
For more from Heather Duplessy Allen Drive, listen live to
News Talks it'd be from four pm weekdays, or follow
the podcast on iHeartRadio.
Bryan Bridge.
Speaker 2 (00:01):
Government has announced a rafter changes. It should make it
easier for local councils to finance infrastructure around new housing developments.
Currently rate payers are left picking up the tab for
sewage lines, local streets and water. Changes will in theory
ensure that developers are paying their fair share. Christ Bishops
the Infrastructure Minister. He's announced it today, minister.
Speaker 1 (00:20):
Welcome, good afternoon.
Speaker 2 (00:23):
So at the moment, what is the shortfall at the
moment between what the developers are paying to the councils
and what the councils are having to make up.
Speaker 1 (00:32):
It will vary from development to development. Just give you
an example I talked about in the speech today at
at Drewy. The Auckland Council's short three hundred and thirty
million dollars because there the development going on out there
and the way the rules work is complicated. But the
way the rules work is they could only charge development
contributions on a very small amount of the development and
they're short about three thirty million, So all of that's
(00:53):
being paid for by every other ratepayer when in reality
it should be falling on the developers and also the
benefities of the new housing and that's why we're changing
the system today to move to a more flexible levy
based system.
Speaker 2 (01:07):
What about places like the one that you're describing where
there's already a shortfall. There's a place out west we've
found around a few developers today out Wes whether it's
so bad they haven't planned obviously, haven't planned for this,
and they having to use wagons in some areas to
remove waste. I mean, what do you do about those situations?
Speaker 1 (01:26):
Well, that's precisely the problem we're trying to solve, right,
So that the funding system for infrastructure for housing is broken,
you've got under recovery of the growth charges. We're not
planning ahead far enough when it comes to wastewater and
storm water, for example, and that's because the system underlying
it in the Local Government Act is broken. So what
we're doing is changing it to a much more flexible system.
(01:47):
We're giving councils the ability to recover for all of
the growth charges that come from new housing and make
sure that when a development turns up that the council
can say, okay, well you can build there, but the
charge is for your wastewater? Is this the charge for
your stormwater? Is this? The charge for the community infrastructure,
your parks and the beautification is this. The charge for
(02:07):
the local streets is this. Everyone knows where they stand.
The council knows how much they'll get, The developer knows
how much it will cost. They can make their decisions
around where and what they build based on that, and
so there's a much more predictable transparency everybody.
Speaker 2 (02:21):
But we know the developer is not going to pay
this and sales. They'll pass it on to the home
buyers potentially first home buyers. Do you know how much
it might push house prices up by well?
Speaker 1 (02:29):
And actually what we're trying to do is lower house
prices over time because the problem at the moment is
we've got a shortage of land right because we zone
land in a very restrictive way, and then we don't
sort out the infrastructure funding that I'm talking about so
that the land can actually be developed. So what's happened
over in Auckland in particular over the last.
Speaker 2 (02:47):
I can see yeah, long land, I can see the
long term benefit that you're talking about, But in the
short term you will have I mean, if you're a
developer and you were going to build something that the
Council was going to pay three hundred million dollars for
and now they're not. That's going to cost you, right,
it will.
Speaker 1 (03:01):
Go backwards into the land price, so it will be
reflected in prices that people are willing to pay for land.
And so our aim is to actually drive down the
cost of land. And the price of land. Land is
so expensive because there's the shortage of it. But we
don't have a shortage of land. We have a shortage
of land that can actually be developed. That's the problem.
So we're fixing that with the ANNOUNCEMCE today.
Speaker 2 (03:20):
Chris Bishop, thanks your time the Infrastructure Minster Chris Bishop.
For more from Heather Duplessy Allen Drive, listen live to
News Talks it'd be from four pm weekdays, or follow
the podcast on iHeartRadio.
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