Alongside its nine-year plan, the city council is consulting on changes to its development contributions policy.
The council says significant increases in charges are proposed for some areas, based on the level of spending planned to accommodate growth there.
Both developer Allan Dippie — of Willowridge Developments — and Port Otago have waded into the debate, calling the proposed increases unjustified.
"The increases of over $10,000 per equivalent housing unit (EHU) in Dunedin will seriously impact the viability of residential projects, and the increases of $30,000 per EHU in the northern settlements of Warrington, Seacliff, Waikouaiti and Karitane will simply stop development from occurring there altogether.
"Ultimately, these increases will be reflected in section prices, which will become unaffordable, and land banking, rather than development, will be the best option for developers."
Mr Dippie said the proposed increases in costs were the "difference between development occurring in the city and not occurring in the city".
"Council should encourage residential development to both provide housing stock for the city and to bring in more ratepayers, which in turn funds ongoing infrastructure improvements."
Willowridge has delivered such projects as the Dukes Rd industrial subdivision and the Heathfield and Ocean Heights residential subdivisions.
Mr Dippie said as increasing the development contributions would have an impact on the feasibility of development, all such increases should be reduced or deferred.
Port Otago has also asked for the council to scrap or reconsider the proposal, while it complained about a lack of information from the council about its costing methodology.
It also criticised the council’s infrastructure predictions, saying its experience was "often that its developments generate less demand for infrastructure than is assumed by council".
The issue has fired up several developers over the past few weeks, particularly after TGC Homes director George Hercus said his company had already been looking at investing elsewhere.
"Do we want to discourage smaller social or infill housing when greenfields multi-lot subdivisions and large multi-unit developments get the economies of scale to still return better profit margins?
"To put that another way, if you want the rich to get richer and others opportunities to wane, keep going on your current course."
Mr Geddes said the smaller contractors, survey firms and associated businesses that tended to assist the smaller subdivisions would also suffer.
"Job losses are a real possibility, whereas larger businesses and developers have greater resources to withstand the reduction in work and could still benefit from larger developers who, with economies of scale, can withstand such changes."
Submissions on the draft policy close on May 16; hearings will take place from May 19.
The council is declining to comment on individual submissions before the hearings.
However, a spokesman has previously said development contributions help councils offset the cost of new infrastructure needed to cater for new developments.
"Without a contribution from developers, the full cost of this infrastructure would need to be passed on to all ratepayers — through increased debt and higher rates increases — at a time when there is already considerable pressure on budgets for councils and families alike."
