Wellington City reverses contentious encroachment fees

Source: 1News

The Wellington City Council has backtracked on a proposal to double fees for homeowners whose properties are built outside its boundary, encroaching on public land.

The council now proposes increasing encroachment fees by one third, pushing up the rate from $13.33 a square metre to $17.77 for this year.

Councillor Rebecca Matthews said the fee increase is to better reflect land values, which have soared 193% over the past 12 years, while encroachment fees rose 18.5%.

But she conceded the council came in a bit ‘hard and fast’ with the proposed 100% increase, and that number was being cut.

"There will still be some people who won’t be happy on both sides of this debate. For some renters, or others who might look at the use of public land and see that we should be trying to get a bit more money from it. But we need to balance that with a cost-of-living crisis and make sure that we are not being punitive," said Matthews.

Encroachments affect the minority of Wellington properties – approximately 5,000 out of 80,000. The average is about $300, and the most common use of council land is for garages or parking structures.

In submissions to councillors’, encroachment holders say the 100% rise was unreasonable, and the economic value of the land is minimal given most is road reserve and unstable.

But in response, council officers said land value is determined by its best use and in some circumstances, it can be extremely valuable.

Peter Steel pays just over $380 a year to the council for his garage that partly sits on a road reserve.

"I get car parking for two cars, that’s all. I have to maintain the garage and it had to be built. And if the council sends me notice I have to remove the garage in one month," said Steel.

He said the doubling of fees was a ‘money grab.’

But not all encroachment owners see it that way.

Mike Mellor said the rates had been too low.

"It’s actually a cash loss. The city is missing out, I think it's four or five million dollars a year, which is a reasonable rental for places that are being occupied."

Cash loss, or cash grab, one thing encroachment holders agree on is that the flat fee is arbitrary.

"It assumes all land in the city has the same value, clearly it doesn’t," said Mellor.

The council’s now considering linking encroachment fees to the rateable value.

But Peter Steel said there needs to be a discussion about what is a fair charge against rateable values.

"Because I have invested, property owners have invested all the money here."

The council is also looking at ways to make it easier to sell land to encroachment holders, but first councillors will vote on the lowered fee hike next week.