The cost of subdividing a single Dunedin property could soon blow out to many times the current level, with one homeowner facing a possible $20,000 council fee to split his property into two.
As the debate over the Dunedin City Council's development contributions policy develops, it has become clear owners of single properties could be hit with the same proposed fee increases that have angered property developers.
Building industry figures say the effect could be to price sections out of reach, leaving idle land otherwise ripe for development.
But Mayor Dave Cull reiterated no decision had been made.
Rather, a question was being put to the community asking who should pay for the costs of new infrastructure for new homes.
The issue began with consultation meetings in March over the proposed policy, which would introduce charges to be paid by developers to meet what the council claims are increased demands on services such as water and wastewater, roads and reserves.
Hearings on the policy were delayed until June after developers, who last week formed the Construction Industry and Developers Association to fight the council on the issue, complained they were being rushed into preparing submissions.
Under the changes, developments placing additional demand on infrastructure could attract extra charges.
A property owner approached the Otago Daily Times after being told by a council staff member the cost of subdividing his single Mornington section to allow the building of another house would, under the new policy, be more than $10,000.
He had called the council to get advice on the possible costs of the plan and was told, under the current policy, they would be less than $500.
A list of figures for the new policy showed rather than $10,000, the cost of subdividing in Mornington was $20,040.
Council strategy and development general manager Sue Bidrose said the figures were correct, but only if councillors chose to charge developers the full extent of what was proposed.
The decision for elected members was whether to charge developers and home buyers the full amount of infrastructure.
At the moment, that money was paid by all ratepayers, and the council could choose to charge developers a percentage, and ratepayers a percentage.
Otago Registered Master Builders' Association president Mike Fahey said yesterday the increases would affect the building industry by loading more costs on top of the high building consent fees the association believed Dunedin already has.
"It's going to mean a section will be quite a bit more expensive than it is at the moment.
"It's the last thing we need."
Mr Cull said Dunedin charged less than other centres in New Zealand, and the council had gone to the community and said: "This is the maximum, what do you think?".
"The question is not should they [contributions] be paid, but who should pay them?"
Council senior planner John Sule said in 2010 the council processed 126 subdivision consents. About 30 made either two sites from one or three sites from one.
Ms Bidrose also responded to a suggestion from lawyer Phil Page last week that the idea for a development contribution had come from a Queenstown consultancy firm.
She said that was incorrect, and the firm, Rationale, had been asked to give council staff a presentation of its assessment of the existing policy in early 2009.
Mr Page agreed on Friday the fact the council had a development contribution policy was not Rationale's idea, but said the firm was involved in aspects of the policy.
