Developers warn of legal action over ‘tax’

New figures show the resort is the most expensive place to rent a house in New Zealand. Photo:...
Housing in Queenstown. PHOTO: ODT FILES
Queenstown developers are warning they might take legal action if the council forces them to fork out a contribution towards community housing.

The comment was in reference to a proposed Queenstown Lakes District Council plan change which would force developers to contribute 5% of the estimated sales value — either through land or a monetary payment — of new subdivisions to fund construction of affordable housing through the Queenstown Lakes Community Housing Trust.

Hearings have taken place in Queenstown and Wanaka this week.

Kingston Flyer and Cardrona Village Ltd representative James Gardner-Hopkins on Wednesday said the proposal was an unworkable "tax".

"The proposed plan change does not in fact promote ‘inclusionary housing’, as it purports to do.

"Unfortunately for the council, saying something doesn’t make it so.

"Rather, if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck.

"It is a tax and is out of jurisdiction."

The proposal went beyond the parameters of the Resource Management Act, he said.

"Even if the council ultimately succeeds in retaining its proposed financial contribution tax ... it will be open for developers to challenge the imposition of a financial contribution tax in the circumstances of their consent.

"They may have any manner of reasons for doing so."

Developing was "hard", he told the hearings panel.

"It is also risky — particularly for small developers.

"The big players can afford to hold their land, and drip-feed to the market.

"Smaller players just can’t do this."

The council needed to be doing more to push other levers to lower house prices, he said.

This could include rezoning land such as at Spence Park adjoining the current Ladies Mile Variation area, or working with developers proactively to advance workers’ accommodation to fill that need.

"These are very real and practical issues, in terms of efficiency and effectiveness, that do not appear to have been considered to any great extent to date."

Several other developers expressed similar concerns — the bulk of the 180 submissions on the proposal were against it.

But Te Whatu Ora Health New Zealand health promotions adviser Monica Theriault told the panel her organisation supported the proposal.

"By enabling a plan change to include provisions for affordable housing in the district, [the Queenstown Lakes District Council] is actively promoting the social, economic and cultural wellbeing of their community.

"Affordable housing not only has positive direct effects on the economy, but also benefits from associated increases in productivity and the benefits from a healthier population."

Poor housing security had significant effects on mental health and wellbeing, she said.

The hearings were overseen by commissioner Jan Caunter and commissioner panel Dr Lee Beattie, Jane Taylor and Ken Fletcher.

The hearings continue today.