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Development Contributions Review

Here at Fox & Associates we talk about Development Contributions quite a lot.  It’s certainly one of the first things we discuss with clients as they contemplate a development.  The charges are often significantly more than our own professional fees.

You might have seen our previous blog about them here:
http://192.185.92.109/~foxassociates/editorialcommentrant/development-contributions/

We have often thought that the Development Contributions regime is a convenient way of avoiding rate hikes, by loading costs onto development and developers.  There’s a lot about the Development Contribution regime that could be changed to be fairer.  At the moment the calculations and justification for the Development Contributions are massive documents that can only be interpreted by economists and the timing for the payments is often when titles are produced, which can be substantially before the housing is built and the additional load comes onto the infrastructure.

Recently the government has been looking at housing affordability, and they’re now going to make some changes to the Development Contribution regime. See the press release here:
http://beehive.govt.nz/release/council-development-charges-reined-assist-housing-affordability

We can only applaud.  Development Contributions are a significant cost for many developments, and as they’re a uniform charge they inhibit housing affordability, as Developers can absorb the charge easier in high-end developments, rather than in affordable housing developments.

We can only hope that, as this change progresses, we end up with a fairer deal for all, and more opportunity for affordable housing.