Hamilton developers air DCs frustrations
Developers say the city council is making it too hard to do business in Hamilton and have called for extensive changes to how the city funds growth.
A group of 19 companies have pursued a judicial review of the council’s development contributions policies, arguing developers are paying an unfair proportion of the cost of new city infrastructure. Companies involved in the case include the Gallagher Group, Chedworth Properties, Porter Properties and Foodstuffs North Island.
The legal challenge, which was heard in the High Court at Hamilton, could have far-reaching implications for how Hamilton funds the cost of growth-related infrastructure.
Development contributions, known informally as DCs, are one of the main ways councils fund infrastructure.
Debt and rates are the other main funding sources.
Counsel Sue Simons, acting on behalf of the applicants, said city developers want a development contributions regime which is fair.
‘‘At the end of the day, it’s in the council’s interest that it has a fair and equitable [DCs] policy,’’ Simons said.
‘‘So that the development community feel that the council is enabling rather than squeezing them too hard, such that they are in a position now that they feel like that it’s getting too hard to do business.’’
Simons said the city council talks about being pragmatic, but this quality is more apparent than real.
There is widespread concern among the development community about how the council has drafted and applied its DCs regime, Simons said, and referred to the issue of building canopies to illustrate developers’ frustrations.
Currently, a business with a canopy attached to its building can incur extra DCs due to the belief that the area under the canopy can be used to expand a business.
‘‘If they said you have to pay stormwater [DCs] because the surface area of the canopy was impermeable . . . and therefore you are creating a greater demand on the stormwater [system], that would be perfectly reasonable and acceptable,’’ Simons said.
‘‘But just to lump water, wastewater and stormwater [DCs] onto someone who has a canopy, that the council has made a unilateral decision that there is potential for it to create this demand, is just too much of a stretch.’’
Development contributions are assessed on water, stormwater, wastewater, reserves and transport activities.
When determining the potential stormwater runoff from a residential dwelling, the council uses bedroom numbers as a proxy to predicting stormwater disposal demand.
Counsel Lachlan Muldowney, representing Hamilton City Council, said a criticism levelled by developers is the council uses bedroom numbers as a way to determine how big a dwelling’s impermeable surface will be.
‘‘The answer is that’s exactly what we are doing,’’ Muldowney said.
Using bedroom numbers to calculate stormwater DCs achieves a ‘‘happy middle ground’’ in that the policy is easy to understand, and takes into consideration the size and scale of different residential developments.
Simons said using a dwelling’s actual impermeable surface area, rather than relying on bedroom numbers, creates a ‘‘fairer and more reasonable picture’’ of the stormwater demand created.
Muldowney said in new city suburbs, such as Rotokauri, the vast majority of dwellings (88 per cent) are single storey. As the type of dwelling evolves in the city, the council can review this aspect of its DCs policy.
The council routinely reviews its DC policy.
‘‘There is an opportunity to pivot to some different sort of stormwater assessment if it proves that, in fact, the kind of density that is starting to be developed in the city is making what are currently anomalies more like the norm,’’ Muldowney said.
Justice Ian Gault reserved his decision.