Paying for Growth : Development Contributions Policy Update 2022

Closed 14 Apr 2022

Opened 22 Mar 2022

Published responses

View submitted responses where consent has been given to publish the response.

Overview

We’ve made some updates to our Development Contributions (DC) Policy and we want to know what you think!  

A growing city means we need new or upgraded services and facilities such as roads, neighbourhood parks and more water pipes. Council’s DC Policy sets out the costs to enable new development and growth in the city and how much of those costs are charged to developers. The charge on the developer is called a Development Contribution or ‘DC’.  
 
Council’s approach is to develop a policy that is fair, considers the wellbeing of the city’s residents, and balances the cost of growth now and in the future. We’re committed to improving the current DC Policy and have identified some specific updates to make sure that happens.   
 
Our DC Policy is usually reviewed every three years alongside our Long-Term Plan (LTP). Since the current Policy was adopted in July 2021, Council has identified an opportunity to provide a remission (reduction) in DCs for developments undertaken by state-integrated schools. Furthermore, in August 2021 we received the outcome of a Judicial Review of our DC Policy which broadly confirmed our Policy as robust and also suggested some areas where we could improve. 

Council wants to hear from all Hamiltonians and key policy stakeholders before we continue with the proposed policy update.  

WHAT WE’RE NOT UPDATING 

We’re not proposing changes to any other areas of the Policy and aren’t seeking broader feedback on the Policy. This proposed policy update is limited to the areas presented in this document. The DC Policy will be reviewed in full in mid-2024 as part of the regular review every three years alongside the 2024-34 Long Term Plan, and this will provide the opportunity for the community, including developers, to submit on the Policy more broadly.

Why your views matter

Proposed changes

We’re proposing three specific changes to our DC Policy and we want to know what you think.  

  • You can review the draft policy tracked change document under the heading Related at the bottom of this page.

CHANGE A - UPDATE THE DEFINITION OF GROSS FLOOR AREA (GFA)

What are we changing?  
We’re proposing to update the definition of gross floor area (GFA) to clarify what we include and exclude. Specifically, we’ve updated the GFA definition to confirm that DC’s will be charged for the areas under canopies and that the floor area under building eaves or roof overhangs (up to one metre from exterior walls) will be excluded from DC calculations.  

Please refer to Section 6.24 of the Policy for the amendment.
 
Why? 
The last time we reviewed the DC Policy, Council was responding to a legal challenge to the previous 2019/20 Policy. The outcome of AGPAC Limited & others vs Hamilton City Council Judicial Review was not known at the time the current 2021/22 DC Policy was adopted in July 2021.  
 
As part of the Judicial Review decision, we received feedback that the GFA definition required clarification of when the floor area under canopies is charged so we’re proposing some minor changes to make this clearer and more transparent. This change also aligns with the eaves exclusion in the current District Plan (our rule book for development) and will provide consistency for developers.  
 
CHANGE B - REVISE THE APPROACH TO CHARGING STORMWATER DC’S FOR MULTI-LEVEL HOUSES

What are we changing?  
We’re proposing a minor change to the way we charge stormwater for multi-storey residential dwellings.  
 
Currently, stormwater DCs for residential dwellings are calculated based on the number of bedrooms. Dwellings with more than one level and four or more bedrooms are charged 1.29 Household Unit Equivalent (HUE). We’re proposing to reduce this charge to 1.0 HUE of DCs for these types of dwellings. This means that a multi-story, four-bedroom dwelling will be charged the same HUE (1.0) for stormwater charges as a standard three-bedroom dwelling.  

Please refer to Section 10.36 and Section 27, Schedule 4 Table 8 of the Policy for the amendments.
 
Why? 
As part of the Judicial Review decision, it was recommended the Council review how stormwater charges are calculated for multi-storey residential dwellings. Stormwater DC calculations work on the assumption that the more bedrooms a dwelling has, the more hard surface area there is on site such as the roof and driveway. This proposed amendment means multi-storey dwellings will pay a lower and fairer DC to reflect the smaller hard surface area.

We’re expecting to see more multi-storey homes built as our city grows and Central Government requires cities like Hamilton to grow up, not just out. This update provides some certainty for developers while Council looks at our residential stormwater requirements as part of our work to meet the National Policy Statement on Urban Development (NPS-UD) and the Government’s high density intensification requirements.  
 
CHANGE C - INTRODUCE A PARTIAL REMISSION FOR STATE-INTEGRATED SCHOOL DEVELOPMENTS
 
What are we changing?  
We’re proposing to introduce a partial remission or discount in DCs charged for development at state-integrated schools that provide a minimum level of public access and community benefit. 

Please refer to Sections 18.27 to 18.30 and Section 24 Schedule 1B Note 11 of the Policy for the additions.
 
Why? 
Currently Council can’t require a DC from state schools under the Local Government Act 2002, so they don’t pay DC charges when they are doing development like building new classrooms or school facilities. However, privately funded schools and state-integrated schools (funded both privately and publicly) are treated like commercial developments under the DC Policy and are required to pay DCs for new developments. 
 
In December 2021, Councillors proposed to introduce a discount, known as a ‘remission’ in the Policy, on DCs for developments done by state-integrated schools to help level the playing field where there is a clear community benefit and access to the facilities against which a remission is sought.
 
In this Policy update, the option put forward for feedback is that state-integrated schools receive a partial remission for developments that meet certain criteria such as public access and community benefit. This remission is at the sole discretion of Council and can’t be applied retrospectively.  
 
OTHER CHANGES  

In addition to these three key changes, there are some other minor amendments that are tracked changes in the attached draft DC Policy. These minor changes have been included to make sure the Policy is current and to correct minor grammatical errors. They do not represent significant changes to the reading or meaning of the Policy.  Further to these changes, Section 23 Schedule 1A Table 1 has been updated to year 2 of the phased charges as noted in Section 9.11.

NEXT STEPS

Council staff will collect and analyse all feedback at the close of the submission period. A summary of the feedback will be presented to the Council on Thursday 5 May 2022.  At this meeting, submitters who want to speak to their written submission will be able to do so. Council will then deliberate and consider all the feedback. We expect the updated Policy to be adopted at the Thursday 30 June 2022 Council meeting and become operational on Friday 1 July 2022.

Please get your feedback to us by Thursday 14 April 2022.