Auckland Council appeals controversial Delmore fast-track housing project

Auckland Council is appealing a decision to give fast-track approval to the controversial Delmore housing development.

It comes as the Government moves swiftly to change local government laws to allow councils to claw back some infrastructure costs from fast-track developers.

The move is being welcomed by councils, but they are pushing for the Government to do more.

As revealed by the Herald last month, Infrastructure Minister Chris Bishop has reacted to outrage over some residential fast-track developments by making tweaks to the fees developers pay councils, known as development contributions.

While it won’t apply to those already approved, such as Delmore and Sunfield in Auckland, and Homestead Bay in Queenstown, it will impact those in other stages of the fast-track system.

The amendment to a local government bill will “ensure councils can set appropriate development contributions that reflect the growth-related infrastructure costs associated with fast-track projects”, Bishop said.

“In response to out-of-sequence growth, mainly housing projects, councils will be able to amend their development contributions.

“It’s a complicated area of policy, at the moment the charges are locked in at the time a consent is granted and sometimes it can end up out of whack with what it should be.”

Infrastructure Minister Chris Bishop.

He said in most cases, it would mean developers paying more to councils.

It would become law by Thursday, he expected.

“Where a development creates additional infrastructure costs, an appropriate share should be met by the development rather than being shifted on to existing ratepayers,” Bishop said.

“It was a pragmatic response to something that needed fixing.”

He’s met with many mayors worried about looming costs.

Auckland Mayor Wayne Brown has been vocal in his opposition to Delmore, a 1200-home development north of Auckland.

Brown said: “It’s good to see the Government finally recognising how badly it got this part of fast-track wrong, but this change comes too late and only fixes one glaring error”.

Auckland Council also confirmed it has lodged an appeal against the decision to approve the Delmore fast-track project.

“We are unable to comment further at this time as the matter is now before the court,” a spokesperson said.

The news came on the same day the council appeared in court to appeal another fast-track-approved development – Sunfield near Ardmore.

An artist's impression of the Sunfield development near Ardmore.

Director of policy, planning and governance Megan Tyler said: “The council believes the panel made four legal errors relating to highly productive land, water and wastewater infrastructure and servicing, stormwater and flooding and the provision of open space”.

“The council does not believe the panel has fully considered these important matters.”

Developer Winton has approval to build nearly 4000 homes in the Sunfield development.

Brown also opposes that project, due to concerns it was on a flood plain.

Speaking to the latest amendments to the law, Brown said: “The problem is that the Government’s fix does not apply to fast-track projects that have already been approved or had substantive applications lodged before the new rules take effect.

“The Government has fixed one mistake. It now needs to deal with the much bigger problem it has created.”

Bishop said he couldn’t comment on Delmore or Sunfield as they were now before the court.

Local Government New Zealand (LGNZ) has joined a chorus of mayors calling for residential developments to be paused.

LGNZ vice-president Dan Gordon welcomed Bishop’s move to change development contributions.

“Today’s announcement shows the Government is listening,” Gordon said.

Auckland Mayor Wayne Brown has called the fast-track approval for Delmore's 1200-home development at Orewa "amateur, pathetic and stupid".

“This strengthening of development contributions was one of the recommendations in LGNZ’s four-point plan to ensure growth pays for growth, and communities aren’t left carrying costs they didn’t create.

“This is a positive step and an acknowledgment that improvements were needed to the way infrastructure costs are recovered under Fast-track. However, they’ll come too late for already approved projects, which means that councils still lose out on significant revenue.”

Auckland councillor Richard Hills, an outspoken critic of some of the developments, told the Herald in a text: ”It’s too late and fixes one glaring error”.

“That error has already locked in a $450-650m cost to all Auckland ratepayers and taxpayers which is the estimated amount we can’t now retrospectively recover through Development Contributions for Sunfield and Delmore.

“The change doesn’t allow us to recover the costs of maintaining and running services to these unplanned communities, we estimate those costs to be in the billions, not millions.”

Auckland Council last week voted to look at requiring developers to pay more for fast-track projects or sending a message to residents that the council will not provide services to them.

Hills said today’s move would not change the council’s position.

“We are considering all options to charge costs back to these developments and we are serious about finding ways to not provide these places with things like noise control, buses, animal control and other services.”

He urged all parties running for Government to campaign on removing residential from fast-track and stop taking the local out of local government.

Gordon said there was more work to do.

“We still think there’s merit in pausing future referrals, requiring consideration of cumulative effects, and reviewing fast-track for housing to ensure it works well with the new planning system,” Gordon said.

“We’d now like to see the remaining recommendations in our four-point plan progressed. We’d welcome working with minister Bishop and minister Watts to make Fast-track work on the ground.”

That four-point plan includes:

• The temporary pause on ministerial referrals to the scheme.
• Requiring the fast-track panel to consider the cumulative effects of multiple projects in one area.
• Commissioning a longer-term review of the system to ensure it fits in with the new planning system developed by replacing the Resource Management Act.

The law change will also allow councils to use development contributions to recover capital costs incurred by another council in meeting the increased demands on their infrastructure attributable to growth imposed by fast-track development.

That portion of funds can then be transferred back to that council.

Local Government Minister Simon Watts says councils would be able to amend their development contribution policies where necessary to recover eligible growth-related costs.

“Importantly, councils will be able to make those targeted amendments without going through the usual consultation process, allowing them to respond quickly where an existing policy does not adequately reflect the infrastructure demands of a development,” Watts said.

“Any amendment will need to be adopted within six months of Fast-track approval, notified to the authorised person and published as soon as practicable.

“We are also addressing cross-boundary infrastructure costs. Where growth in one council area creates eligible infrastructure costs for another council, the collecting council will be able to recover those costs and transfer the appropriate share of the development contribution.”

The changes would apply to all projects, unless an applicant had received a draft decision to approve or decline a project.

“This creates a clear transition point and helps councils recover infrastructure costs from eligible projects while giving certainty to projects within the fast-track process,” Bishop said.

“Fast-track has been a much-needed circuit-breaker for projects that should be creating jobs, delivering homes and growing local economies. These changes maintain that certainty and effectiveness while making sure the infrastructure funding system can keep up.”

LGNZ’s move follows letters sent by Auckland, Queenstown, Waimakariri and Selwyn councils demanding a pause on fast-track housing projects.

Katie Bradford is a senior correspondent at the Herald. She has been a broadcast journalist for more than 20 years and was based in the press gallery for 10 years. She specialises in politics, business and Auckland issues.