INDUSTRY groups have expressed concerns about planned changes to how development is levied in Newcastle, saying the extra $6.5 million council intends to collect annually will be a cost new-property buyers bear.
The council approved a new draft section 7.11 development contributions plan (DCP) and a revised draft section 7.12 DCP for exhibition on Tuesday night.
The plans set out how the council will charge developers to help fund infrastructure like roads, cycleways and community facilities over the next 15 years.
The council will raise more than $10 million per year under the plans, an additional $6.5 million annually than it is currently collecting.
"City of Newcastle's proposal to dramatically increase development contribution rates is a concern," the Urban Development Institute of Australia's regional chair Geoffrey Rock said.
"UDIA supports, in-principle, the levying of contributions to provide for services and infrastructure needed as a result of new development.
"It is important for those contributions to result in timely delivery of infrastructure that benefits the communities our members create, as ultimately it is the homeowner who pays the contribution through the purchase price of the property.
"However, at the end of 2020, the city held over $28 million in unspent contributions."
Former lord mayor and Hunter developer Jeff McCloy said the changes would slug "mum and dads" with increased contributions to be passed down the line.
"Between payments to RMS, payments to bio-diversity offsets, payments to such and such ... they're just squeezing the lemon out of the poor homeowner," Mr McCloy said.
Craig Jennion, the Housing Industry Association's Hunter executive director, said infrastructure charges and levies applied to development were "effectively a tax on homebuyers" and the "range of facilities" councils sought to fund, along with their "quality and depth", had increased over the years.
The 7.11 DCP applies to new residential lots/dwellings and will fund $123 million in infrastructure works.
The 7.12 DCP, which applies to all other development, would raise more than $32 million to help fund community infrastructure.
Property Council of Australia director Luke Achterstraat said the DCPs reflected those of nearby councils, but his organisation wanted "a commitment for stronger reporting on how contributions are spent, so the community can better understand when and where infrastructure will go".
He also flagged concerns about the potential additional charge to developers should the council introduce an additional affordable housing scheme as planned.
"We need to be mindful of the cumulative impact of taxes, fees and charges on the cost of housing - so while the current proposal is proportionate to what other nearby councils are doing in their plans, we need to factor into account the council's aspiration for affordable housing charges, which could tip the balance, and counterintuitively make all housing less affordable," he said.
"Affordable housing contributions need to be delivered in a way that increases the pool of housing being delivered through incentives, not through taxing development to an unviable level.
"Other promising options for delivering more affordable housing is the partnership opportunities in building affordable housing on government owned land. Affordable housing cannot be taxed into existence."
