It seems that money hungry councils are popping up all over Australia, finding new and exciting ways to line their coffers.
AdelaideNow… $15,000 bill for land buyers:
MT BARKER Council will force housing developers to pay up to $15,000 a block to rezone land, with the cost passed on to buyers already facing an affordability crisis. In a first for South Australia, the fee would pay for capital works and services across the council area. Developers now pay for infrastructure including roads, stormwater and sewage pipes only on the estates they develop. The council said it may not rezone any more land for housing if developers refused to pay.
Does the idea of paying a per lot rezoning fee sound a little rich? It sounds like it’s happened elsewhere in Australia, what’s the story in other countries?
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{ 3 comments… read them below or add one }
Here in Ottawa, like in Here in Ottawa, like in other cities in Ontario, Canada, developers have to pay for all applications, and also for their share of capital works in their area. In the case of going from unzoned land to residential construction, these fees add up. A zoning change will cost you $7,700 but that’s if it is already zoned. If the land is to be subdivided, the cost will be $30,000 and up depending on the number of housing units, plus the costs of engineering studies, public consultation, legal fees in case the decision is appealed, etc.
Upon filing construction plans and start of construction, the developer must pay not only for servicing for the lot, but pay into a fund to provide and maintain arterial roads, transit expansion, libraries, and so forth. These are about $10,000 per house for infill, $18,000 for greenfield, less for more compact forms, plus a few dollars per square foot of floor space. Some capital projects are tax-supported and others are development-supported. There are also funds for parkland (5% of the land) and for schools ($1,000 per unit).
In theory, no tax money is to be used for development. In addition now getting zoned for residential outside the designated urban boundary is nearly impossible at any cost. Cities have determined that the infrastructure they already have in place is sufficient to support the next 20 years worth of growth with infill, and that using land beyond that should not become a burden on taxpayers.
“Affordable housing” is exempted from many of these fees.
Thanks, It’s great to hear
Thanks, It’s great to hear the reality of developer costs in your part of Canada, does this still apply to small scale subdivision, (one large lot into two smaller?) Seems like that would discourage smaller scale intensifying of development.
I can see that developers hold the cards in NSW at the moment, and hold some serious political clout. If you read this post about Ecotraders and Hardie Holdings, you can get a feel for the level of influence developers have here!
The process and set of fees The process and set of fees for “severance” (1 buildable lot to 2) is different than for “subdivision” (1 non-buildable lots to several buildable). It’s usually cheaper but not necessarily. The costs involved in getting permission to build, particularly if the zoning already allows the smaller lots, are low since they are related to the incremental cost of servicing the land. But since the land is worth more, the costs related to the value of the land are greater. And there are more voters nearby so the nature of the haggling differs.
Sadly, developers are the same everywhere. Lots of honest smaller ones, plus some big ones that view laws and Council votes as another engineering challenge that can be overcome with money and ingenuity.