Development contributions strengthened to recover Fast-track infrastructure costs
The Government will amend legislation to let councils adjust development contributions for Fast-track projects, ensuring infrastructure costs are recovered without burdening existing ratepayers.
The Government will amend the Local Government (System Improvements) Amendment Bill to allow councils to set development contributions that reflect the actual infrastructure costs of Fast-track projects. Housing and Infrastructure Minister Chris Bishop and Local Government Minister Simon Watts stated that Fast-track approvals do not exempt developers from infrastructure constraints, as expert panels already impose conditions for roads, water, and wastewater upgrades. The issue arises when existing development contributions fail to account for accelerated or cross-boundary infrastructure demands created by Fast-track projects, shifting costs unfairly to ratepayers.
The amendment will enable councils to amend their development contribution policies without standard consultation if they do not adequately cover Fast-track infrastructure costs. Changes must be adopted within six months of Fast-track approval, notified to the authorised person, and published promptly. The Government will also address cross-boundary costs, allowing collecting councils to recover eligible infrastructure costs from other councils affected by growth.
The new settings will apply to all Fast-track projects unless they have already received a draft decision to approve or decline when the legislation comes into force. This creates a clear transition point, ensuring councils can recover infrastructure costs from eligible projects while maintaining certainty for ongoing Fast-track processes. The changes aim to keep the infrastructure funding system aligned with accelerated development timelines.
The amendments are an interim step ahead of the broader Going for Housing Growth programme, which includes replacing development contributions with a Development Levies system from 2029. In the meantime, the changes provide councils with immediate tools to manage infrastructure funding for Fast-track projects, ensuring ratepayers are not unfairly burdened by growth-related costs.