by: Jordan Oldham, Partner | Mike Doesburg, Partner
23 September 2026
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The Government has made changes to the Local Government Act 2002 to address an issue increasingly exposed by New Zealand’s fast-track consenting regime: who pays when development occurs ahead of council infrastructure planning?
Councils can now recover additional infrastructure costs associated with Fast-track projects through targeted changes to their development contribution policies. While narrow in scope, the changes are a significant response to growing concern that major developments approved through the Fast-track Approvals Act 2024 create infrastructure pressures that existing development contribution settings were not designed to address.
Development contributions are the main tool councils use to recover the cost of growth-related infrastructure (such as roads, three-waters infrastructure, parks and reserves) from developers rather than existing ratepayers.
Under the current system, council development contribution policies are based on planned growth and anticipated infrastructure investment. Fast-track approvals can disrupt those assumptions by enabling development at a scale, location or timing not anticipated by council planning, leaving councils unable to fully recover the resulting infrastructure costs.
The amendments now equip councils to:
As a result, developers will need to account for changing development contribution obligations following project approval if the project creates infrastructure demands not reflected in existing policies. This will become an increasingly important factor in project feasibility and funding assessments.
The changes do not apply to projects that have already secured Fast-track approval. However, projects that had entered the Fast-track process but had not yet received approval may be affected. For those developments, councils can now adopt or amend a development contribution policy within six months of approval to require contributions towards infrastructure costs associated with the development.
The Fast-track approvals framework itself remains unchanged. The amendments deal solely with how the infrastructure generated by out-of-sequence Fast-track developments is funded.
The catalyst for change has been growing concern that large-scale Fast-track developments are proceeding in locations where infrastructure investment has not been planned or budgeted for, leaving councils to fund the shortfall.
Development contributions operate on the principle that “growth should pay for growth”. However, where a development proceeds outside anticipated growth areas, brings forward infrastructure upgrades, or consumes capacity that councils had earmarked for other growth areas, existing contribution policies are under-recovering infrastructure costs, ultimately burdening ratepayers with the shortfall.
Recent debate surrounding proposed and approved Fast-track housing developments in Auckland has brought this issue into sharp focus. Projects including Delmore in Ōrewa, Sunfield in South Auckland, and large-scale housing projects such as Ridgeburn in Queenstown have become emblematic of broader tensions around unplanned growth, infrastructure capacity and the limits of council long-term planning assumptions.
The amendments are unlikely to be the final word on infrastructure funding reform. While councils now have a clearer pathway to recover development contributions from Fast-track projects, broader changes to New Zealand’s growth funding framework are still on the horizon.
The Government has signalled that, if re-elected, it will replace the current development contribution regime with a broader development levies system from 2029. The changes are likely to have implications beyond Fast-track projects, particularly where developments generate infrastructure costs that are not adequately captured by existing development contribution policies. They are intended to strengthen the development contribution regime and support a more nationally consistent approach to infrastructure funding. The Government has published discussion material on the proposal.
The latest changes are therefore best seen as an interim response to Fast-track funding issues while the longer-term framework is developed.
Fast-Tracking may accelerate approvals, but navigating the legal and commercial implications still requires careful planning. Our Environment and Planning, Commercial Property, and Construction teams are well placed to help.
Jordan Oldham, Partner – Construction, Infrastructure & Projects
Mike Doesburg, Partner – Environment and Planning
Fiona McLeod, Special Counsel – Environment and Planning
Tamzin Brown, Law Clerk – Commercial Property
Piper Pengelly, Law Clerk – Environment and Planning
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