Subdivision needs $400m of roads. Who will pay?
Funding gap may add $27,000 to each home’s cost
Tauranga’s council could face a “substantive funding gap” for new roads aimed at unlocking much-needed housing in the city’s east.
The roads are key routes for Te Tumu at the eastern end of Pa¯pa¯moa that is set to house 15,500 people when completed.
The greenfield development needs two transport corridors, at an estimated cost of $400 million, that would extend The Boulevard and Te Okuroa Drive in Pa¯pa¯moa.
If the funding can’t be found, it could potentially add $27,000 to the cost of each new house.
Speaking at a recent Tauranga City Council meeting, city planning and growth manager Andy Mead said the council started work on the business case for the roads four years ago.
In that time, the way NZ Transport Agency Waka Kotahi funded arterial roads in greenfield sites had changed, Mead said.
Previously, NZTA funded half the cost, but its funding availability and policy had changed “substantively”, particularly in greenfield areas, he said.
“To the point where more or less they don’t really sort of fund these roads anymore or if they do, they only fund a small portion . . . of a service.
“These transport corridors are very expensive in Te Tumu, circa $400 million. The current approach we have around funding from NZTA means that we have a substantive funding gap.”
Mead said the council was seeking endorsement, not funding, for the Te Tumu roads at this stage because there was no confirmed timeframe for the development.
Housing was unlikely to be delivered in Te Tumu until 2040, once land development and civil works timeframes were considered.
The Boulevard’s preferred option was to be the area’s public transport route with two dedicated bus lanes and two for traffic.
Te Okuroa Drive’s preferred option was a four-lane road with a dual cycleway on one side and a shared path on the other.
Mead said they would be “limited access roads” that didn’t have driveways off them, but would have intersections with local roads.
Commission chairwoman Anne Tolley said the multi-modal transport options were important.
“Even if we just purchase the land and we don’t get the funding, because it’s really hard and expensive to come back later on.”
The commission wouldn’t want to see the roads narrowed and government policy would probably change, Tolley said.
Council strategy, growth and governance manager Christine Jones told Local Democracy Reporting if the council received only a 10 per cent subsidy of $40m instead of half, the rest of the funding would need to be found elsewhere.
If this funding couldn’t be found externally it would need to be paid for by developers, Jones said.
This could result in the 6000 Te Tumu homes each costing an extra $27,000, she said.
NZTA Bay of Plenty and Waikato regional manager system design Jess Andrew said the National Land Transport Fund did not contribute to the cost of growth where a private developer was the primary beneficiary.
This had been made clear since December 2021, she said.
“This is because public investment should be targeted to delivering public benefit. The costs of growth are to be borne by local councils and the developers.”
Any works that added a “broader public benefit” would be eligible for funding, Andrew said.
The business case will go to NZTA for endorsement of the preferred options for the Te Tumu transport corridors.