Infrastructure Minister Chris Bishop says a law change going through Parliament next week will let councils charge fast-track developers more for the roads, pipes and services their projects need. His comments came after Auckland Council warned that homes being approved outside its plans could leave ratepayers facing a bill of up to $5 billion.
Auckland councillors were given the figures on Tuesday 8 September, at a meeting of the council’s Policy, Planning and Development Committee. Council staff have counted a pipeline of about 50,000 to 60,000 “unanticipated” homes. These are houses proposed outside the areas the council has planned for growth, or before the infrastructure to serve them is ready.
According to the council’s statement after the meeting, providing infrastructure and services for those homes would cost the council about $3 billion, and that is before water, wastewater and running costs are counted. The NZ Herald and The Spinoff both reported a combined estimate of around $5 billion once longer-term costs are included, although they described the split between developers and the council differently.
Councillors voted unanimously to send staff away to check the legality of two options, The Spinoff reported. One is a targeted rate that would make developments such as Delmore at Εrewa and Sunfields in south Auckland carry the full cost of their infrastructure. The other is providing fewer council services, or none, to those areas. “And if that means the per-household charge to a developer may be $200,000, so be it,” Manurewa-Papakura councillor Daniel Newman said at the meeting.
Committee chair Richard Hills said the council supported well-planned growth but that the fast-track approvals scheme had made the problem worse, and that the Government’s planned rates cap would further limit what councils could afford. “However, ratepayers cannot be expected to carry the costs of developments that we have had no opportunity to budget for,” he said in the council’s statement.
Hills went further on RNZ’s Morning Report the next day. “We have to draw the line. We have to make people know that if you’re buying into those areas, we may not be able to fund it,” he said. He pointed out that some developers plan for residents’ associations to run water supply and wastewater, and said that if those schemes failed, all ratepayers would end up paying.
Mayor Wayne Brown said developers should pay the full cost of the growth their projects create rather than passing it on to ratepayers. “I’d be happier with fast-track if it was fast,” Brown said, calling for a six-month deadline to start building once a project is approved, and for approvals that cannot be transferred.
Bishop told RNZ on Thursday that Hills had got ahead of himself, but he agreed councils needed a better way to recover the cost of growth that arrives out of order. “If there’s infrastructure required to service developments that are out of sequence, then the development contributions paid by developers should be able to make those costs, and that’s a core government objective,” he said.
He also questioned the size of the problem. The 50,000 to 60,000 homes were spread over the next 20 to 30 years, he said, and not every project would get through. “Firstly, they’ve got to apply. Secondly, they’ve got to be approved, and then there’ll be infrastructure conditions attached to all of that, and obviously development contributions to contribute towards that.” He said legislation coming to Parliament next week would close a gap in the system and answer much of the criticism.
The change was first announced on 14 August by Bishop and Local Government Minister Simon Watts, as Newswire reported at the time. Under the current rules, development contributions are locked in once an application for resource consent is made, and Bishop said councils had told the Government they could not properly recover the cost of infrastructure for unplanned or out-of-sequence developments. According to the ministers’ release, councils will be able to update their contributions policies after a fast-track application has been lodged, as long as they adopt the change within six months of the project being approved. Councils will also be able to pass costs across boundaries where a development leans on a neighbouring district’s infrastructure.
The Government said in August that the change would be made through an amendment paper to the Local Government (System Improvements) Amendment Bill, which it expected to pass in mid-September. The latest version on the legislation website is still the one reported back from the Governance and Administration Committee in November 2025. The fix is meant to be temporary. Development contributions are due to be replaced by a new system of development levies from 2029.
There is a limit that matters to Auckland. The ministers’ release says the change will not apply to fast-track projects that have already been approved, or to any project whose full application has been lodged by the time the amendment takes effect. That leaves out the 1,200-home Delmore subdivision at Εrewa, whose approval in August led the Auckland and Queenstown mayors to ask for a pause on fast-track housing. The council says it has appealed two separate fast-track approvals.
The rates cap is the other half of the squeeze. The Local Government (Rates Capping) Amendment Bill passed its first reading on 2 September. It would require councils to keep annual rates increases within a target range of 2 to 4 per cent. Councils must consider the range from 1 July 2027, and the cap takes full effect from 1 July 2029. It is now before the Finance and Expenditure Committee.
Auckland Council staff are due to bring back a proposed response at the committee’s October meeting. By then the Government’s amendment should have passed, and councillors will know how much of the gap it closes. Who pays for new suburbs, and how much say councils should have over where they go, is one of the quieter questions at the 7 November election. You can see where you sit on the wider issues with the Newswire voting tool.
Should developers carry the full cost of servicing new suburbs, or should councils plan and build ahead of growth? Tell us what you think in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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