Rotorua mayor leads the way

Local councils are about to release their annual plans for public comment. Not only do those plans include the financial budgets and rates, they outline the collective vision of councillors.
There are many ways councillors can be visionary and they don’t even need to be creative, they merely need to copy the good things others are doing. Here’s an extract from March 2014 issue of NZ Property Investor about Rotorua.
“New mayor Steve Chadwick [a former Labour Party MP] seems to have injected fresh enthusiasm into many residents – she is working to encourage new builds [by] making Rotorua the country’s first district council to scrap developer contribution fees – an estimated saving of $8000 on the average cost of building a house. Chadwick says the contributions were ‘a barrier and disincentive to investment, something which we were no longer prepared to tolerate. This stand has received widespread support, and investment interest in Rotorua is already showing positive trends as a result’.”
Our local council charges between $20,000 and $40,000 per new household unit created. If a commercial development is assessed to have say 10 times the impact of a household, the fees would rise by a factor of 10.
As Rotorua’s new mayor has quite rightly stated, not only do those fees make housing less affordable, but it’s a disincentive for new business (and jobs and money) to come to a district.
Putting aside the dubious assumptions the WDC makes when calculating their extortionate levies, the fees collected only $1.3m in the 2013 financial year, less than 1% of its total revenue of $140m (and that’s before deducting the scheme’s administration costs).

If other councilors elsewhere had any sense of vision they would follow Rotorua and scrap these fees in their councils. Creating a vibrant local economy is actually easier than most politicians realise. They need to stop pretending they create wealth – they don’t, businesses do – and remove some of the bureaucratic barriers that they have put up. Abolishing development impact fees would be a good start and the impact on prosperity in a region is likely to be immediate and substantial.

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