Council development fees

Hamish Rutherford at Stuff reports:

Council development levies are pushing builders towards constructing bigger, less affordable homes because of the one-size-fits-all approach of councils, Housing Minister Nick Smith says. …

Developers were being charged “exactly the same whether you’re building $700,000, six-bedroom homes, or whether you’re trying to build an economic, two-bedroom home for a retired couple”, he said.

“That incentivises the developers to build large, expensive homes, rather than providing houses of the more affordable range.”

A flat development fee will of course incentivise larger houses. But the fee should reflect the cost.

The review would consider whether the Government should force councils to charge levies proportionate to the size of the homes being built, with Dr Smith claiming “logically” a large home would place more strain on sewerage, water and stormwater services than a smaller home.

The sensible thing would be a mixture of a flat fee and a size fee.

“The reason that development levies are interesting is that they have risen [in cost] by more than any other component in the whole picture, 360 per cent in a decade is much too much.”


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