Proposed Development Contributions Plans to Fund Future Infrastructure

Consultation on an improved approach to funding future infrastructure to support growth in the city will be considered by the elected Council on Tuesday night. 

The draft Section 7.11 and 7.12 Development Contributions Plans propose that new developments pay a levy towards the financial cost of necessary improvements to community infrastructure like roads, footpaths, parks and playgrounds to support new residents and growth in the Local Government Area. 

City of Newcastle Manager Regulatory, Planning and Assessment Michelle Bisson said the City's Development Contribution Plans have been updated to bring Newcastle in line with neighbouring Councils and ensure ratepayers weren't being short-changed. 

"Our city is experiencing a development and population boom, with a forecast 23,000 new residents and 11,500 new dwellings by 2036, which is why we need to ensure public infrastructure keeps pace with growth and is equitably funded," Ms Bisson said. 

"Under the draft plans, our proposed contribution rates will still be less than surrounding Councils, while allowing for an additional $6.5 million per year to be raised for investment in essential roads, sporting facilities and playgrounds. 

"The draft Development Contribution Plans won't apply to minor works undertaken on existing residential dwellings under $200,000, which means pools, garages and minor extensions won’t be affected. 

"The draft Plans reflect Newcastle's emergence as an urbanised city, ensuring future development makes a reasonable contribution toward the cost of infrastructure required to cater for those future populations, while keeping our city as one of the lowest contribution schemes in the region." 

In the 2019/20 financial year, the City collected $2.49 million in development contributions (outside of the Western Corridor). In the same period, the City spent $3.05 million on identified infrastructure projects, including Beresfield Local Centre public domain works, the fit out of Civic Station Visitor Information Centre, and other connectivity projects such as pathways, bus stops and cycleways.
 
 “Development contributions will help fund important community infrastructure over the next 15 years as our City continues to grow, including the cycleway network, pedestrian accessibility and mobility network, local area traffic management works, bus shelters, parks and playgrounds, sporting grounds and recreation facilities, and town centre public domain improvements," Ms Bisson said.
 If endorsed by Council, the draft Plans will be publicly exhibited for 28 days, allowing the community and the development sector to make submissions. 

The draft plans:

Draft 7.11 Plan applies to residential accommodation comprising new additional dwellings/lots (outside of the Western Corridor area). The contribution rate is charged per dwelling / lot. 

Draft 7.12 Plan. The contribution rate is charged as a percentage of the estimated cost of the development. 

Hunter Regional Councils Contribution Rates 

Lake Macquarie Council per dwelling / lot 

• Belmont $27,731.21 
• Toronto – Central $28,295.60 
• Glendale catchments $21,685.12 - $24,206.59 
• Charlestown $25,509.92 

Port Stephens Council per dwelling / lot 

• Central Growth Corridor $19,649.00 
• Raymond Terrace – Rural $17,686.00 
• Tomaree Peninsula $18,444.00 
• Fern Bay $15,814.00 

Maitland Council per dwelling / lot (3 bed dwelling/lot rate used for comparison) 

• Thornton North $20,088 - $29,998 
• Lochinvar $19,070 - $25,744 
• Louth Park $8,258 - $14,857 
• Gillieston Heights $6,825 - $11,863 
• Farley $22,224- $30,000 
• City Wide (other) $4,173 - $7,505 

Note: This information is provided for indicative comparison purposes only. Information on respective Council contribution rates was sourced in early 2021 and are subject to indexation each quarter in accordance with those Council's respective contributions plans. 

Key Facts

• Existing dwellings are unaffected by the draft Plans 
• Draft Plans would generate an additional $6.5 million to be invested in community infrastructure, including cycleways, footpaths, playgrounds and libraries 
• Approximately 70% of projected dwelling stock anticipated to comprise secondary dwellings, 2 bedroom units, multi dwelling housing) to house the future population growth by 2036 – cost per dwelling in these circumstances is around $10,000-$13,000. 
• Single dwellings will only be 5% of the total future housing stock. The contribution rate for a single dwelling house of approximately $17,000 is comparable to similar rates in adjoining LGAs, for example $16,000 in Fern Bay, $22,000 in Glendale and $26,000 in Charlestown. 
• Development contributions do not adversely affect affordability. The following is an extract from the 2021 Productivity Commission Report (p33): 
• "Contributions do not necessarily add to the final price of new housing. The maximum price achievable for a new apartment or dwelling will be determined to a large degree by the broader housing market, with consideration of the unique characteristics of the property and its location. When a contribution is levied, to the extent that the broader housing market and characteristics of the dwelling are no different, the maximum price achievable for the dwelling would remain unchanged."