The cost of growth falls on everyone

We need housing. But in order to have houses, we need infrastructure. And right now our local councils are trying to decide who pays for it.

Tauranga and Rotorua’s councils have come up with different proposed solutions as part of their annual plans.

In Tauranga, the council is proposing using the Government’s Infrastructure Funding and Financing Act. The act allows highgrowth area councils, including Tauranga, to invest in new, essential infrastructure — roads and water, wastewater, stormwater — without affecting their debt levels.

It would mean borrowing money which would be repaid through levies on properties that benefit from the infrastructure.

If approved about 2000 Tauriko West homes would be expected to pay up $2500 a year for the next 30 years — a total of up to $75,000 — to help pay off a Government loan.

In Rotorua, the council is looking at a draft development contributions policy for community consultation.

According to a council statement about the policy, the key purpose of development contributions is to ensure the developer that creates the need for growth infrastructure, pays a fair share of the capital cost for new or expanded infrastructure. It takes the burden off ratepayers in the district. In the draft policy contributions would vary and apply to the Rotorua urban area. The contribution would be calculated by multiplying the number of household unit equivalents by the total cost of the relevant activities — water ($2050), wastewater ($1604) and stormwater ($7202) which does not apply to Ngongotaha¯ .

A three-lot residential development in the east, west or central would pay the total charges multiplied by three ($32,568) while one in Ngongotaha¯ would pay $10,962 as the stormwater costs are not included.

In my view, both councils have the right idea in theory. Property developers, homeowners and councils should all play a part in infrastructure upgrades because having fit-for-purpose infrastructure is going to indirectly benefit residents city-wide. Fit-forpurpose infrastructure means there will be fewer issues such as overflows so all residents have a responsibility to contribute in some way. However, the cost of development shouldn’t just be on homeowners.

At the end of the day, property development is a business and a way to make money and, to make money, you have to spend it.

Infrastructure upgrades are everyone’s responsibility whether you feel you directly benefit or not.