Quick change to fast-track law being pushed through Parliament this week

MPs will this week vote on an amendment to local government laws that’ll allow councils to claw back some of the costs of infrastructure from fast-track developers. 

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

“The issue we are addressing is where existing development contributions do not adequately account for the development enabled through Fast-track, because they reflect what is anticipated in a district plan rather than the proposed use of the land. 

“That can happen where a development proceeds sooner than anticipated in council infrastructure planning, brings forward the need for a major network upgrade, uses capacity that had been planned for growth elsewhere, or relies on infrastructure across council boundaries. 

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

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

Local Government NZ has joined a chorus of mayors calling for residential developments to be paused. 

LGNZ vice-president Dan Gordon welcomes Bishop’s move to make changes to development contributions. 

• Why is the Government amending the fast-track system?

But he’s developed a four-point plan to “maintain public confidence” in fast-track housing. 

That 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 and commission a longer-term review of the system to ensure it fits in with the new planning system developed by replacing the Resource Management Act. 

“We support a fast-track regime for infrastructure and housing and the Government’s wider programme to break down barriers to building more houses,” Gordon said. 

“But the reality is the Government didn’t get cost recovery settings right from the get-go. That means developments can go ahead without regard for local housing or infrastructure capacity, while existing ratepayers are left footing the bill.” 

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

The law change will also allow councils to use development contributions to recover the 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 will 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 will apply to all projects, unless an applicant has 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.” 

It’s expected the legislation would pass this week. 

A petition by residents of Waimauku West calling for a project there to be halted is also gaining support. 

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