Development Contributions policy update

October 2019

Agenda• Welcome and introductions• What has happened in 2019• What this means for 2020• Overview of policy review process• Preparing advice to the council• Other areas for consideration• Research on usage of parks and community facilities• Next steps

What has happened in 2019

• Contributions Policy 2019 live from 1st of January

• Changes to the definition of community infrastructure

• City Rail Link budget increased

• Moving to annual cycle for Contributions Policy review

What this means for 2020• Potentially two rounds of consultation on the Development Contribution Policy

• Round 1‒ Changes to community infrastructure projects‒ Changes to the City Rail Link Project

https://infocouncil.aucklandcouncil.govt.nz/Open/2019/05/GB_20190502_AGN_8227_AT_WEB.htm

• Round 2‒ Annual cycle review based on adopted Annual Plan/Long Term Plan budgets

Overview of policy review processRound 1

• Report on proposed changes and recommendation to consult to councilPlanned for February 2020

• Formal consultation on proposed changesPlanned for February - March 2020

• Amended Contributions Policy considered by the council for adoptionPlanned for May 2020

What do you think?• Local Government (Community Well-being) Amendment Act 2019

‒ Inclusion of public amenities

‒ Proposed additional inclusions at this stage‒ Libraries, recreation centres (including pools), community youth facilities

• What do you think should or shouldn’t be included in public amenities?

Moving to annual review cycleInformal

consultationApril

Council considers proposed changes

July

Formal Consultation

August

Amendments to proposed changes

November

Policy considered for adoption by the

councilDecember

Long term plan / Annual budget

adoptedJune

Long term plan / Annual budget

consultationFebruary

Other areas for consideration• Residential demand factors

• Stormwater

• Parks and Community Facilities

• Transport

Note: Consideration may not result in changes to the policy

Research on usage of parks and community facilities

• External researcher to conduct the research

• Key focus is to determine the level of use and service provision

• Questions will test the use of these facilities by the following groups:‒ General population‒ Retirement village independent living ‒ Student accommodation on tertiary sites

Next steps• Report on proposed changes and recommendation to consult to council

Planned for February 2020

• Formal consultation on proposed changesPlanned for February - March 2020

• Council decision on proposed changesScheduled for May 2020

Questions

Development Contributions Policy Information sharing

The questions, comments and responses captured at the recent information sharing sessions are outlined below.

The sessions were held on: Manukau Civic Centre / 31 Wiri Station Road, Wednesday, 13th November from 10.00am – 11.00 am

Auckland Town Hall / Queen Street, Auckland CBD Thursday, 14th November from 10.00am – 11.00 am

General questions Response

1. Why are DCs being charged to fund things like the CRL instead of being funded by rates?

The CRL is funded in equal shares by central government and Auckland Council. The council is funding its share with a mix of rates and DCs. The additional investment in the CRL will support growth across the region, including, for example to provide for nine-car trains rather than six-car trains.

2. Is the fuel tax helping fund transport works? What is the fuel tax paying for if not regional initiatives?

Yes. Auckland Transport has a list of projects funded by the fuel tax on their website, https://at.govt.nz/about-us/transport-plans-strategies/regional-fuel-tax/

3. What are the funding sources for a light rail – will be it funded by central or local government?

Light rail is being discussed at the national level. At this stage, no decisions have been made by central government.

4. How does the Regional Land Transport Plan timeframe work in with this?

The transport research for development conributions is on demand factors and is not linked to the Regional Land Transport Plan.

5. Is there a difference between maintaining a facility versus funding for a new building or refurbished facility when it comes to DCs?

Yes. The maintenance or replacement of an existing asset is not funded from DCs. Only the growth component of the capital cost of an asset is included in the policy.

6. DC layers for GIS maps aren’t publicly available. This would help as the online estimator tool sometimes shows different funding areas from what is actually invoiced.

We will investigate this to see if the DC layers can be made available in the public version.

7. Developers appreciate the opportunity to speak directly to councilors. Will this opportunity be available in the future?

If the council decides to propose changes to the policy it will determine the most appropriate method for engaging with developers after considering the nature of the changes. Developers are welcome to pass on their issues to councilors or council staff.

8. This presentation is too high-level and it does not acknowledge the feedback provided by developers at the consultation held last year. Providing feedback to the council is expensive and time consuming. The process is designed to help the council and not developers. The council was to have responded to the issues raised at the consultation in February and this has not happened. There has been no communication on these issues and it seems as if they have been forgotten and that the council is not listening or taking the consultation seriously.

This presentation was not intended to be highly detailed. We are investigating a broad range of issues based on developers’ feedback.

9. Please provide more details about the tertiary accommodation research. Will the details be shared?

We will make available the findings of the research when completed. In the meantime, we invite direct feedback from interested parties.

General questions Response 10. Is this the first stage of the retail demand factors

work? Research on retail demand factors are unclear. No, it is the second stage. We are still working out the specific details around the research, but we wanted to flag to developers that we are undertaking this work. We will be contacting developers through the Property Council in the first instance. We also invite those who want to provide input to contact us directly by email at Contributions.PolicyTeam@aucklandcouncil.govt.nz

11. Is there a discussion document that outlines what the council is working on and includes timelines?

The council hasn’t determined whether it wishes to propose any changes to the policy. If it decides to make any changes we will produce supporting information for consultation. We will continue to work on ways to improve communication with developers.

Developers’ General comments It is difficult to see the physical benefits of paying DCs. For e.g. a park was promised in Swanson which is being

developed. This helped during the marketing of the development by attracting people who would utilize the future nearby park, but the development is now almost fully finished but the park still hasn’t been built.Concern was expressed about the lack of certainty for developers from annual policy changes. It could result in the creation of pocket communities rather than long term planning of larger developments.

Invoicing at the time of resource consent is much appreciated, especially since other councils don’t necessarily do this.

The margins are very low in Special Housing Areas and it is difficult to make these developments profitable. The criteria for first home buyers need to change for affordable dwellings SHA areas. The Unitary Plan may need to be reviewed as the first home buyer criteria has been written into the plan. There is a lower demand on infrastructure and a discounted DC price would be appreciated.

Community infrastructure questions

Response

12. Are projects lumped into one giant pre-2014 group of projects?

No. Projects funded by DCs are listed in Schedule 8 to the policy.

13. What happened to projects that were funded before 2014 but were not built until after 2014?

The uncompleted portion of community infrastructure investments that weren’t able to be funded under the 2014 legisation were removed from the policy.

14. Will there be a backlog of facilities which will be added to the DC policy?

No. The council’s 10-Year Budget includes provision for investment in community infrastructure to serve growth. The policy only includes assets that could be funded by DCs under the 2014 legislation. The 2019 amendments to the legislation allow the council to use DCs to fund a wider range of community infrastructure. The council will need to decide if it wishes to fund the growth component of these assets with DCs. We are interested in your views on which community infrastructure assets should be funded by DCs

15. How are pools dealt with, considering that there are conflicting scales of payment, for e.g. some pools being free, others where entry fees are charged?

The entry fee to pools funds operating expenditure. DCs can only fund capital costs relating to growth. The level of DCs for a pool is not affected by whether an entry fee is charged or not.

Community infrastructure questions

Response

16. Does acquisitions for land mean just land? (In the definition of community infrastructure)

DCs for reserve acquisitions can be used for any land related acquisition, e.g. the acquisition of land with a building for community use.

17. Will playgrounds be added to what is considered a community facility?

Both the 2014 and 2019 legisalation allowed DCs to fund playgrounds. Playgrounds are included in the policy as community infrastructure.

18. Does the council have a list of public amenities? The list of community infrastructure projects and programmes funded by DCs is set out in Schedule 8 of the policy See response to question 13 above.

DC review timing and pricing questions Response

19. Is it too difficult to engage and conduct a review every three years instead of every year? Why not just leave the policy alone for a specific period of time? Annual reviews will affect the cost for developers and will influence price fluctuations for DCs and cause additional stress. The previous 3 yearly review allowed the price to be locked over three years, which was appreciated and provided certainty for developers. Can the council provide more certainty to developers, like freezing rates or other mechanisms? Can the council provide guidance so developers can have more certainty of pricing to enable forward planning? It is taking developers longer to lodge consents due to additional environmental requirements, eg monitoring of bats and streams must be completed at certain times of year. Annual reviews could result in the creation of pocket communities rather than long term planning of larger developments.

Material changes to capital expenditure plans usually happen every three years when the council’s 10-year budget is developed. Any changes to the policy can only occur following consultation. This provides the community and developers with advance notice of possible changes. Changes approved by the council as part of an annual review can be implemented following decisions or after a transition period. The council has amended its policy six times since 2010. Some reviews have only marginally changed the cost to developers.

20. Is there a cap in place for price increases in funding areas?

The current policy doesn’t provide for a cap on DCs.

21. Is there a dollar figure for increased DC pricing? We are preparing options for the council to consider.