New policy for developer contribution

WA property developers may soon be required to pay local governments a set amount of money towards community infrastructure, under a policy to be introduced by the state government.
The draft policy, aimed at making the existing system more transparent, includes a formula to calculate each developer's share of the total cost.
Under the current system, developers make both financial and in-kind contributions towards basic infrastructure, with extra services negotiated between the parties.
The new process will require each local government to outline a 10 year infrastructure plan, including a capital works program.
Contributions from individual developers will then be calculated, based on the catchment area of the infrastructure.
Funds are to be managed in a separate account and spent only on the agreed projects.
The policy has been developed by a joint steering committee, made up of the WA Local Government Association, the Urban Development Institute of Australia (WA), and the Department for Planning and Infrastructure.
UDIA WA chief executive Debra Goostrey said it would formalise the process already in place for infrastructure contributions, and help maintain housing affordability.
WALGA president Bill Mitchell said the policy would create a fairer system, with both large and small developers required to make payments.
The policy will be released today for public comment, before being assessed by the WA Planning Commission.

A statement from Planning Minister Alannah MacTiernan is pasted below:

New policy for development contributions for community infrastructure.

A new planning policy that will help local governments establish a fair and appropriate basis for charging land developers for the cost of local community infrastructure has been released for public comment.

Planning and Infrastructure Minister Alannah MacTiernan today released the Western Australian Planning Commission draft State Planning Policy 3.6 Development Contributions for Infrastructure.

Ms MacTiernan said the State Government and local government had worked with the Urban Development Institute of Australia (UDIA), representing land developers to produce the policy.

"Local government, represented by the WA Local Government Association and the development industry, wanted a fairer, more transparent process for establishing local government infrastructure charges," she said.

"The practices vary greatly between different local governments and this creates difficulties for developers.

"Both organisations are to be complimented for successfully working together to develop the policy.

"This policy will help local governments identify the cost of local community infrastructure that is directly attributable to new developments in their area.

"The aim is to ensure that developers, and through them homebuyers, are asked to contribute to those costs that directly relate to the additional need they generate."

The Minister said that under the proposed new policy, local governments would first develop a clearly identified and costed infrastructure plan to demonstrate the needs generated by development.

The infrastructure plan would be subject to public comment and become part of the local planning scheme.

"Developers will then negotiate the combination of in-kind and direct contribution with the local government," Ms MacTiernan said.

"All contributions will be held in a special account and only expended on the agreed community infrastructure, with the payable amounts part of the clearance process for the issuing titles."

UDIA WA chief executive officer Debra Goostrey said the issue for developers was the need for transparency and the timely delivery of infrastructure that would directly support the new residents.

"The draft policy, when it comes into effect, will provide greater surety for purchasers, so they are not paying for infrastructure which is not relevant to them or which should be paid from other sources such as the rates collected by councils, or from State or Federal government grants," Ms Goostrey said.

"Developers consider this to be part of a strategy for containing costs that are impacting on affordability."

WALGA President Cr Bill Mitchell said local governments, particularly those experiencing rapid growth, were limited in their capacity to fund a wide range of infrastructure to support growth.

"In particular, local governments find it difficult to fund basic local community infrastructure such as community centres, recreation centres, libraries and child care centres," Cr Mitchell said.

"The policy will ensure that appropriate contributions are made for funding and maintaining community infrastructure."

The draft policy is available on the WAPC website - http://www.wapc.wa.gov.au/public and submissions are welcome until Wednesday, July 16.