A revised policy which sets out how the city shares the costs of growth between ratepayers and developers will go out for public consultation this Tuesday (19 March).

Hamilton Kirikiriroa is New Zealand’s fastest growing metro and is finding it increasingly challenging to fund infrastructure to service growth.

Hamilton City Council’s draft Development Contributions (DC) Policy sets out the costs to enable new development and growth in the city and how those costs are shared.

Charges on new residential, commercial and industrial developments – known as Development Contributions (DCs) - are one of the main funding tools available to Council to fund infrastructure to unlock growth.

The draft 2024/25 DC charges are substantially higher than in the current DC Policy. The increased charges are being driven primarily by inflation, the higher cost of borrowing, and an increase in Council’s three-waters capital programme.

Hamilton Mayor Paula Southgate said the city has experienced significant growth over the past decade and this is projected to continue. Meanwhile, the cost of delivering growth infrastructure has been impacted by factors outside of Council’s control, making it more expensive to provide and fund infrastructure.

In drafting its DC Policy, Council has strived to strike a fair balance, so as to not negatively impact growth.

“Finding the right balance between affordability and sustaining our growth is crucial for the prosperity of our city,” Mayor Southgate said.

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“I recognise that the financial environment is also tricky for developers and don’t wish to deter their great work. However, it’s also important to note that growth costs not covered by DCs or external funding become a cost to the ratepayer. Our aim is to develop a DC Policy that’s fair to the development community, considers the wellbeing of residents, and balances the present and future costs of growth.

“I strongly encourage the community and our key stakeholders to share their views about what’s proposed.”

There are seven proposed changes in the revised DC Policy.

A key change is a proposal to provide a 100% remission of DCs for some development on Maaori customary and freehold land and for papakaainga on any land. Papakaainga means a community where tangata whenua live, primarily clustered around marae or other places of significance.

To continue supporting a more vibrant central city, Council is proposing to extend the DC remission for developments in the central city for three more years, but reduce the remission from 50% to 33.3%. Council is also proposing to extend for three years a total remission of DC charges for CBD buildings six or more storeys high.

Council is proposing to amend capped non-residential DC charges to only target small scale retail and commercial development in neighbourhood centres.

It is proposed Council retains its existing social housing remission as a “community housing remission” and amend the eligibility criteria to support a long-term increase in social housing in Hamilton.

A further change put forward is applying a standardised stormwater charge to all residential developments, regardless of their size.

Council is also proposing to provide more detail about when DCs are required during the development process.

Alongside the revised DC Policy, Council is seeking feedback on changes to its Growth Funding Policy. This policy directs Council’s decision-making for growth projects and associated infrastructure where those projects are not aligned with Council’s Long-Term Plan.

Public consultation on these policies runs from 19 March to 21 April 2024.

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