The recent decision by Dubbo Regional Council to undertake a complete review of developer contributions will result in a fairer system for everyone.
Over the next six to eight months, an independent property consulting firm will undertake a full review to ensure council is receiving a fair share of development.
At the February meeting of council, we will be able to look at the independent review and us it to create a system where everyone benefits.
This review was sparked by the Draft Planning Agreement Policy which appeared before council’s July meeting.
The policy included a “value capture” mechanism, which would enable council to seek 20 per cent of any land value increase that occurred as a result of rezoning.
In general terms, it meant that any land that a developer applies and was successful to have rezoned from residential to commercial, and that increased in value as a result, would incur a fee equivalent to 20 per cent of the change in value. For example, if a parcel of residential land was worth $100,000 and increased in value to $200,000 because the zoning changed to commercial, council would get 20% of the $100,000 increase, which would be $20,000.
There have been very few circumstances in the past few years where value capture would have even been triggered.
There was a campaign from some people in the city to oppose value capture, using false information and a fear campaign calling it a tax and saying it would push up house prices across the board. Frankly, this notion is absurd considering most land in Dubbo already has the appropriate zoning for development.
Whether they held (misguided) fears, or had an agenda they were pushing, I don’t know. But there were certainly a number of things they had wrong.
For one, I never once said I would support value capture, despite some people calling it “Ben’s big, bad tax”.
Myself and my fellow councillors deliberately didn’t make our opinions known within the community, preferring to hear from residents.
For the record, Councillors had decided that rather than approving this Draft Planning Agreement Policy, it would be better to conduct a total review of contributions.
For too long, there have been a range of different developer charges that have been applied, decreased or sometimes waived altogether, without a fixed set of rules. The reality is that with the merger between Dubbo City and Wellington Councils, it is timely for a full and frank review.
Value capture may still be a part of council’s Planning Agreement into the future, but it might be that other fees and charges are reduced, or the review may result in something completely different.
This is going to be a very detailed report and will take a lot of effort. It’s an opportunity for Dubbo Regional Council to make sure we get the right mix between supporting development and getting reducing the burden for ratepayers. As part of the review process, a comprehensive and detailed community stakeholder engagement program will be undertaken to gather the views of the community on how they what their council funded.
We must remember that every council in Australia has a significant proportion of its revenue from developers. As I have been reminding people, in the Dubbo Region rates only contribute around one-third of Council’s income.
Dubbo Regional Council, as with every other council, needs developer contributions in order to operate otherwise rates would be astronomical.
In this time of drought we cannot afford to simply be looking at rate increases as a means to operate. Residents are rightfully concerned about being hit too hard by rate notices. I personally am committed to making sure rates are affordable. To do this we need the good will of all the Dubbo community when council is budgeting for its operational costs.