Tasman’s new development levies have been labelled as “absolutely outrageous” by a local developer who warns that the increases could stymie growth in the region.

“It will be a bit of a nail in the coffin for development at pace where we need a really broad and fairly high number of properties being developed,” said Graham Vercoe, owner of GJ Gardner’s Nelson franchise.

Development contributions are levies paid to councils from new subdivisions to help finance future infrastructure projects that will benefit the new homes.

Vercoe believed the development contributions are already high enough.

“It disproportionately punishes new homeowners because ultimately we, as developers, will pay it, we'll pay whatever the cost is, but we will pass it on,” he said.

“Houses are already not affordable, and all you're going to do is make it worse.”

Tasman District Council has different fees for each of the three waters and transportation areas, which are determined by future projects that will benefit specific catchments in the district.

Total costs across the Waimea Catchment have increased by $16,000 to $54,150, Motueka Catchment costs have almost doubled to $38,200, and the fees in the Golden Bay Catchment have more than tripled – jumping from $12,600 to $41,300.

Areas across the rest of the district only pay contributions for transportation, which have more than halved to $1300.

The main drivers of the hikes are stormwater projects in the Waimea Catchment, and new wastewater treatment plants for both Motueka and Tākaka in Golden Bay.

Development contributions cover 30 per cent of the cost of water and wastewater projects, 80 per cent of stormwater projects, and just six per cent of transportation projects.

Higher house prices caused by higher fees could contribute to a downturn in development and construction for the region, which could affect “vast numbers” of people, Vercoe said.

New Census data reveals that Tasman was the region with the fastest rate of growth over the last five years at 10.3 per cent, much of which was centred in the Richmond West Development.

Vercoe is one of four directors overseeing that development.

While he said the contribution increases won’t affect the growing subdivision due to existing arrangements, he didn't think the explosion of housing on the site would have been possible if they had been paying the new contribution prices.

“The prices end up going so high that the average person will never get into a house in the Tasman region.”

Rather than placing the cost on developers, Vercoe thought the large infrastructure projects should be funded by specific district-wide rates despite their localised benefits, similar to the Waimea Community Dam.

“It's a community-wide problem. It's not a problem that should be foisted on somebody that wants to come and build a new house in the region.”

However, the council reinforced its intention that developers bear the cost of the increased demand on infrastructure, when it approved its 10-Year Plan last week.

In plan deliberations last month, elected members also declined to phase in the increases, or to introduce a lower contribution rate for brownfield developments.

A council spokesperson said major growth is planned over the next decade and the contribution charges will help pay towards that cost.

“Many of our networks are at or nearing capacity and major upgrades are required to accommodate future growth.”

The stormwater projects affecting the increases for the Waimea Catchment are focused on works in Richmond on Borck Creek and in Māpua’s Seaton Valley.

Motueka’s wastewater treatment plant is subject to river flooding risk and future sea-level rise, located on and discharges to culturally sensitive areas, and near capacity. Its resource consent runs out in 2035.

Tākaka’s treatment plant is similarly near capacity and at risk from flooding.

The two new wastewater treatment plants are currently slated to cost $181.6 million and are expected to push the council above its debt cap by the 2032/33 and 2033/34 financial years.

However, that has been described as the “worst-case scenario” and the council will pursue other alternative solutions to lower the anticipated costs.

In addition to Vercoe, representatives from engineering firm Davis Ogilvie, hapū-owned business Wakatū Incorporation, and local development companies presented to the council with their concerns about increased costs during the council’s 10-Year Plan hearings in May.

Kāinga Ora representatives also highlighted that Tasman’s development contributions were “quite a bit” higher than those in neighbouring Nelson, which could draw development away from Tasman.

However, Tasman Mayor Tim King said Nelson secured $36 million from the Government’s Infrastructure Acceleration Fund to support housing growth in 2022 whereas Tasman only received $1.2 million for a single site in Motueka.

The final charges for the next three years are only slightly lower than what the council had consulted on.

The council expects to collect $142 million in development contributions over the next decade.

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