There’s a lot going on in our great river city and the next 10 years will see some challenges and opportunities for Hamilton Kirikiriroa.
Hamilton City Council is talking to its community about the key issues we are looking at over the next 10 years that we want your feedback on. This feedback will help the Mayor and Councillors confirm a 2021-31 Long-Term Plan which runs from 1 July 2021 to 30 June 2031.
Alongside the Long-Term Plan, Council is also consulting on other policies which support the Plan and the wider vision and strategy for our city.
One of these policies is our Development Contributions Policy (DC Policy). This policy sets out how we share the costs of growth between the development sector and the general ratepayer. We want your views on the changes we are recommending for the policy.
There are six key changes we are proposing. Detail on these changes, how to find more information, the proposed policy, and how you can have your say is included in this consultation document.
With people at the heart of everything we do, our Mayor and Councillors need your feedback before they make their final decisions on the DC Policy. Already Hamiltonians have told us the kind of city they want, and where they want Hamilton to be in the future.
Enabling our city to grow means we need new or upgraded roads, new recreational areas and more water and waste water pipes. This infrastructure is paid for through a combination of government subsidies, rates from existing ratepayers, rates from future ratepayers, and a charge on the developers. The charge on the developer is called a development contribution, or DC.
Council’s DC Policy sets out the costs to enable development in different areas of the city, and how much of those costs are charged to developers.
Council has a financial principle that ‘those who benefit from growth pay a fair share of the cost of that growth.’ In determining that share, Council considers how enabling growth benefits the developer, but also the wider benefit to the people of the city.
It is important that Council finds a fair and appropriate balance to the way the costs of growth are shared. Our policy must also consider the long-term effects for the city and all ratepayers and residents.
For example, higher DC charges reduce the amount of growth costs paid by ratepayers but could also mean developers may be less likely to invest in Hamilton if these costs are perceived to be significantly higher than elsewhere. This may mean less growth, fewer jobs and a weaker local economy. It could also mean a reduced housing supply, which makes housing less affordable.
Reduced DC charges could mean faster growth and a stronger economy but would mean a greater share of the costs of growth would be paid by existing ratepayers. A reduction in DC charges in one area does not mean developers in another area pay more. Costs associated with the reduction are funded by Council through other means, largely through the general rate.
One of the ways we are proposing to encourage growth and reduce the financial impact for developers is by transitioning any increase in DC costs across a three-year cycle. Council can also encourage growth in different parts of the city through reducing DCs for certain types of buildings or in some areas.
These reductions are called remissions and can be set at different levels. For example, a 50% remission in one area would mean developments in this area would only pay half of the DC charge assessed. This is based on the expectation that the longer-term wellbeing benefits of a targeted approach to growth in certain areas will outweigh the short-term financial benefit of increased DC revenue.
Council’s approach is to develop a DC Policy which considers the wider wellbeing of the city’s residents, not just the financial considerations.
Getting the balance right means that it is difficult to please everyone. Council is currently responding to a legal challenge to its existing policy and the way it is given effect to. The outcome of that challenge will not be known until later in 2021. In the meantime Council will continue to update its DC Policy as required by legislation and will reflect any outcomes from the legal challenge in subsequent policy updates.
There are six key changes proposed to our existing policy and several other changes of a minor or technical nature. These changes are designed to support continued growth, fairly share the costs of that growth, and provide for wider community wellbeing in Hamilton.
We recommend you take the time to read the draft DC policy to identify all changes. For information on the data we use to model DC charges, click here. You are entitled to make a submission on any part of the draft policy, not just the proposed changes.
Our six recommended changes are detailed below, as well as what these changes would mean in practice and the positive or negative impact on Council’s revenue over the period of the Long-Term Plan 2021-31.