Fee change discourages infill development

A proposed tweak to a Tasman council fee could make it “almost completely unaffordable” to do infill building, a local developer warns.

Each new housing unit currently pays development contributions to the council – a special one-off fee collected to help finance future infrastructure projects that will benefit new homes.

Last year, Tasman District Council hiked the development contributions significantly to help cover the cost of large stormwater projects for Richmond and wastewater projects for Motueka and Golden Bay.

At the time, owner of GJ Gardner’s Nelson franchise Graham Vercoe said the changes would be the “nail in the coffin” for development at pace.

But now the council is proposing that an existing discount of 25 per cent, on stormwater-specific contributions for properties that build on-site stormwater detention, be restricted solely to the Richmond Intensive Development Area – loosely meaning central Richmond.

Currently, the discount can be received by properties across the entire Waimea and Motueka catchments.

On-site stormwater detention provides tanks that temporarily store and slowly release the water to avoid overloading the stormwater network.

The council proposed restricting the discount because even with on-site detention, total run-off still increases from developments which can impact both peak and total flows.

Rainfall is projected to increase in the future and, to maximise development, on-site detention would be needed as some further stormwater capacity upgrades are unlikely to be feasible.

Detention also doesn’t protect against overland flows which still impact the stormwater network.

But Graham, who is also one of the minds behind the Meadows development in Richmond, says the proposal would make infill development “almost completely unaffordable.”

The change could add almost $3500 to a Waimea subdivision and about $1400 to one in Motueka.

Graham says most infill developments were undertaken on a limited budget and so, even though the additional costs would be relatively small within the total cost of subdividing a property, any increase was a burden.

“The whole thing is going to completely discourage people from developing.”

Required detention for storm- and wastewater could add about $35,000 to the cost of an infill subdivision, Graham adds, so the removal of the discount would discourage infill development when some greenfield properties don’t require on-site detention facilities.

The change would increase the council’s income by about $200,000 per annum.

The proposal to retain the discount within central Richmond aligns with the council’s goal of intensifying the district’s existing urban areas.

However, local urban designer Timo Neubauer says the discount would have “hardly any effect” on promoting intensification.

“I wouldn't even go as far as saying it’s a step in the right direction, I think it’s not even worth worrying about.”

Timo says that continued greenfield expansion was “bankrupting” the Tasman council as it was much more expensive over the long-term to build and maintain a wider infrastructure network.

As such, he thinks the additional yearly revenue for council of $200,000 was “absolutely insignificant”.

Instead, he wants development contributions targeted at greenfield developments and greater use of targeted rates for those living in dispersed environments.

“If you want to live in a dispersed environment like this, you actually have to pay for it... what we have is people who live in more central areas subsidising that type of lifestyle.”

A council spokesperson says the change’s primary purpose was to recognise that the council must invest in stormwater infrastructure to provide for growth.

“Retaining [the discount] within the Richmond intensification area, however, is recognition that the council wants to tilt the scales more in favour of intensification, and is on top of the discounts already provided for smaller dwellings.”

The council is also proposing several changes to remissions for papakāinga on Māori land which would generally make the remission more accessible but would also reduce the remission’s size by half.

Due to the low number of Māori developments currently in the council’s pipeline, that measure was not expected to significantly affect council finances.

Consultation on the changes is open until 28 April.