The Council has had a development contributions policy since 2004. Development contributions are collected to fund infrastructure required to support growth including the provision of roading, water supply, wastewater, parks, swimming pools and libraries along with public transport and active travel infrastructure.
Our current Development Contributions Policy was adopted in 2021 and now requires review.
The policy sets out the methodology used to recover the cost incurred by Council for providing growth infrastructure from those who benefit from the provision of that infrastructure, such as private developers.
The policy currently provides an adjustment for residential developments with gross floor area (GFA) less than 100m2. This is because less demand on services is assumed for smaller units.
The adjustment reduces the proportion of a full development contributions charge that has to be paid in line with the GFA. For example, a residential unit with a GFA of 80m2 would pay 80% of the full relevant development contributions charge or 0.8 HUE.
The size of new residential units has reduced in recent years with the proliferation of townhouses. This is likely to mean a higher occupancy per m2 in new houses.
The policy is based on assumptions about the average demand of a single household, and so the Council is only looking to adjust for situations that are significantly different to assumed demand.
As a result, the Council has re-considered the current approach to providing small residential unit adjustments.
(A) Retain the current approach
(B) Provide a set adjustment for one-bedroom (habitable room) residential units only.
(C) Do not provide any adjustment and charge all residential units 1 HUE.
Provide a set adjustment for one bedroom (habitable room) residential units only (Option B)
One-bedroom residential units will be assessed at 0.6 HUE for all activities. A reduction of 0.4 is provided on the basis that this is the approximate proportion of a HUE for one person.
This means the development contributions charge will better reflect the usually lower demand on infrastructure from this housing type.
Stats NZ data confirmed that 2/3 of all one-bedroom residential units have one usual resident. 87% of all one-bedroom units have two or fewer usual residents.
The impact of this change will depend on the size of the residential unit.
Two- and three-bedroom residential units with gross floor area of less than 100m2 may be worse off under the policy because they will no longer be eligible for a small residential unit adjustment and will instead be charged 1 HUE per unit.
One-bedroom units may be better or worse off depending on the total GFA of the unit.Existing demand credits recognise that a development may replace previous development on the same site and therefore not place additional demand on infrastructure and facilities. If a development is replacing like with like it will not be required to pay development contributions.
The current policy is that existing demand credits expire after 10 years.
A significant number of existing demand credits have expired in the last three to four years on sites of former buildings damaged in the 2010/11 earthquakes, particularly in the Christchurch CBD where over 1,000 buildings were demolished or too damaged to use.
Several developers have asked for credits to be extended or at least provided on their own developments.
(A) Retain the current policy setting
(B) Extend the life of existing demand credits
(C) Provide an indefinite life of existing demand credits
(D) Do not provide existing demand credits
Retain the current policy setting – existing demand credits expire after 10 years (Option A)
This strikes a balance between managing infrastructure capacity wisely and being fair to developers in recognising that development had occurred on a site previously.
Existing use credits essentially require the Council to reserve capacity in its infrastructure. Increasing the time for which the Council reserves infrastructure capacity would not be prudent stewardship of community resources. The Council needs to ensure it managers network infrastructure efficiently.
If development contributions aren’t required because credits last indefinitely (or for a longer period than 10 years) then the revenue forgone would be picked up by ratepayers instead.
Development contribution policies of other councils provide for a range of existing use credits – from no credits at all, all the way up to indefinite life of credits. The policy provides one of the longer credit-lifespans of those that set a time frame on the life of existing use credits.
There is also significant financial impact to the Council if this policy were to change. For example, the value of expired credits in the central city, based on new HUE charges is around $24 million (GST exclusive).
Existing use credits will continue to expire 10 years after a site last exerts demand on Council infrastructure. After this point, sites will revert to 1 HUE (household unit equivalent) existing use credit.
A significant slowdown in growth projections from 2021 coupled with substantial increases in the cost of providing growth means higher costs are being spread across fewer projected new households. This means Development Contributions are set to increase in the proposed policy review.
The charges in the current 2021 policy are significantly lower than previous policies. The primary cause of this is abnormal growth projections.
View the full charges in the Draft Development Contributions Policy 2025 (pages 50 - 141)
You can also view the total charges by catchment area and see how these compare to our previous 2016 and 2021 Development Contribution Policies.
Growth projections have been revised as part of this review. The 2024 growth forecast has a slower rate of growth in all aspects compared to 2021 (an average 0.52% per annum over 30 years compared to 2.06% in 2021).
The inputs for the Council’s DC Policy reviews are based on the Statistics New Zealand medium population and household growth scenarios. As Statistics New Zealand regularly revise their projections, it is not uncommon to see change in growth projections over time.
Growth projections that informed the 2021 policy were significantly higher than in the previous policies due to post-earthquake population shifts and changes in the district. Following the earthquakes in 2010 and 2011, Christchurch experienced sudden and rapid decrease in population, driven by a significant downwards swing in net migration. Between June 2010 and June 2012, the city’s population decreased by 21,200 usual residents. By June 2017 the population had recovered to above pre-earthquake levels, which equates to the city growing by an average of around 5,000 usual residents each year. This is around 1,000 more people per year than the city averaged in the 10 years before the earthquake sequence. Since the city recovered to its pre-quake population in 2017, the rate of growth has slowed. In the six years since June 2017, the city has grown by around 2,600 people per year on average.
The accelerated growth that the city experienced post-quake during the rebuild was reflected in the 2013 projections that underpinned the 2021 policy, resulting in a higher level of projected growth (and lower DCs) than in the past.
Statistics New Zealand’s revised projections have since been released and have been used in the development of the draft DC Policy reflect the more recent growth patterns that the city has experienced.
Statistics New Zealand will continue to regularly update their population and household projections, including the underlying assumptions, and the Council will continue to adopt these updated projections, ensuring that we are using the most up to date information available to inform our planning.
Your feedback will help shape the final Development Contributions Policy adopted.
We will endeavour get back to you as soon as possible, however for more technical questions this may take a number of days to respond to.
If the proposed 2025 DC Policy is adopted by Council in May 2025, on what date will the Policy come into effect?
At this stage, it is proposed to take effect on 1 July 2025.
Where can I find information about the development contribution increases to commerical and industrial properties in Christchurch?
Kia ora,
The HUE equivalences for non-residential development are outlined in Part 8 of the policy. Transport and stormwater HUE equivalences are in 8.1, water supply equivalences are in 8.2 and wastewater equivalences are in 8.3.
In light of central government announcing a new development levy system to come into effect in 2027, will you pause or continue the 2025 Development Contributions Policy Review?
Thanks for your question.
Until the new legislation is enacted, Councils have a legislative requirement to have a policy on development contributions and to review it every three years. We're currently working in line with these requirements. Staff will continue to engage with central government officials on this programme of work and will provide elected members and the public with updates as information becomes available.
Kia ora,
Charges vary depending on where in the city the development is occurring. You can view the charges per catchment area (per HUE) here.
If you're wondering what you'd currently pay, we have an estimator on our website where you can plug in your address and it will give you a charge for one HUE - https://ccc.govt.nz/consents-and-licences/developm...
With the proliferation of infill housing, most of which has no effective garaging and at least 2 people in each unit - both with a car, there is wear and tear on the Council streets. Also, there will be increased loadings of pollutants as they park cars on the streets every day which leak pollutants like oil and air conditioning fluids. How has this been addressed by current and proposed development charges?
We look at each project in Council's capital programme in order to all identify projects that service growth development in some capacity. From there, we determine how much of a project is being driven by growth and DCs will be used to recover that portion of the project. Many projects have at least some form of a growth component, including transport projects such as street upgrades and renewals in infill areas.
It seems strange to use such a large average for ISA. It does not fit with fair and equitable and proportionate in the LGA. You cannot group when it is quite unfair to some. It seems that the small houses which fit more on one site will be paying significantly more toward stormwater mitigation than larger homes. The grouping is too large. This incentivises large homes that sprawl. I do note that the proposal does incentivise mitigation, I applaud that.
The policy uses household unit equivalent (HUE) to represent a unit of demand. A HUE is the average demand a household places on Council infrastructure. It is assumed that all single households place this level of demand on Council infrastructure. This is an efficient method of assessing development contributions for residential development.
In reviewing the policy, the Council determined the average demand a household places on Council infrastructure for each activity from a HUE. The average demand is re-considered as part of each policy review to account for changes in household demand. For stormwater, we (along with most other councils) use average impervious surface area (ISA) of a lot. As part of this review the average ISA was updated from 427m2 to 367m2 which reflects that residential units are getting smaller. Changes in average ISA are based on modelling provided by Lynker Analytics Ltd.
The policy still assumes that each vacant lot contains one HUE. So a smaller residential unit built on a vacant lot would not attract a development contribution requirement. Where additional residential units are being built (that is, where a development contribution requirement would be triggered) any one bedroom residential unit would receive the small unit adjustment as outlined in the policy).
Belfast had over 107 hectares of land rezoned residential & commercial in 2012. There is an estimated Development Contribution revenue to the CCC in excess of $49 million. We have had $22 million spent on water, sewerage and stormwater upgrades. Now we need footpaths, linking paths, library's, school pool upgrades, all of the infrastructure identified necessary for our community in the 2010 Belfast Area Plan. We should be receiving the DC funds for our growth as its not slowing down here.
Kia ora,
The council considers growth and both a city wide and sub-city level. Our growth model enables us to explore likely future growth patterns across the city, and this information is used to inform our planning.
It is important to note that DCs is a cost recovery tool for the growth component of projects that are already in the Council’s capital programme. The Council collects DCs for a range of infrastructure projects including, footpaths, libraries and public Council-owned pools (but not school pools). If the specific project has a growth component it will be included in the DC Policy and we will collect DCs to recover the growth component of that asset. All projects for which we collect DCs are outlined in the schedule of assets, which can be found in Appendix 2 of the draft policy.
Thanks!
1) Will the changes to the DC policy apply from 1 July as has happened in the past? 2) For resource consent applications lodged before this date, would they still be subject to the current DC policy?
1.) At this stage, staff intend for the policy to take effect on 1 July 2025. This is dependent on the Council adopting the final policy.
2.) Section 198 (2A) of the Local Government Act 2002 requires the Council to undertake its assessment of development contribution requirement under the development contributions policy in place at the time it receives a complete application for resource consent, building consent or authorisation to connect to Council infrastructure. Consents lodged between now and when the new policy takes effect will be assessed under the 2021 policy.
What do the proposed kitchen definitions entail? Could a bar, butler’s pantry or laundry be miss-identified?
Kia ora,
In the draft policy the definition of a kitchen has changed from:
"Kitchen or kitchenette means a part of a building with a sink that is capable of being used as a cooking area. (See section 2.2.2 of this policy: if a kitchen in an area means there is a self-contained residential unit, then this constitutes a household unit.)" to "Kitchen or kitchenette means a part of a building with any equipment used for cooking (including but not limited to an oven, rangehood or stove) and/or a sink or tap connected to potable water that is capable of being used as a cooking area."
This should be read in conjunction with the definition of a residential unit, which is:
“Residential unit means a self-contained building, part of a building, or group of buildings used for a residential activity, that includes a kitchen and bathroom facilities, and is physically separated, or capable of being separated, from any other residential unit”
In order for a kitchen to create a self-contained residential unit, the space also needs to contain a bathroom and a means of separation from any other residential units on the property. So, a butler’s pantry wouldn’t create a separate self-contained unit because they tend to be within the main kitchen area. An area labelled a bar or laundry *could* potentially assessed as a kitchen, but to trigger a DC requirement it would need to create a self-contained residential unit. For example, a sleepout with a bar/sink but no bathroom would not create a self-contained residential unit.
The Council’s usual process for considering whether there are two or more areas ‘capable of being separated’ is to draw a line around areas on the plans that contain the defined elements for a single unit and determining if steps/work can be taken that do not require consent, which would prevent access between those two areas.
While the Council can only assess based on the actual design features of submitted plans, the Council may take the labelling on plans as determinative. While labels assist with our assessments, often applicants will label a second kitchen or kitchenette as something else, or do not show elements of the design which would reveal the area to be a kitchen, or they intend to change the use or complete additional building work that does not require consent after Code Compliance is issued to separate the units. It is also possible that a subsequent owner could change the use even if not intended by the original applicant. For these reasons, we must make the assessment based on what the area is capable of being used for.
I acknowledge that this is a lengthy answer, so let us know if you need anything to be clearer.
Thanks!
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