Wellington City Council has backtracked on a proposal to double fees for property owners whose properties are built outside its boundaries, encroaching on public land.
Council is now proposing to increase the encroachment fee by one-third, increasing the rate from $13.33 per square meter to $17.77 for this year.
Councilor Rebecca Matthews said the fee increase is intended to better reflect land values, which have soared 193% over the past 12 years, while encroachment fees have risen 18.5%.
But she conceded the council had come a little ‘hard and fast’ with the proposed 100 per cent increase, and that number was being reduced.
“There will still be people who will not be happy on both sides of this debate. For some tenants, or others who might look at public land use and see that we should try to get a little more out of it. But we have to balance that with a cost of living crisis and make sure we’re not being punitive,” Matthews said.
Encroachments affect the minority of properties in Wellington – about 5,000 out of 80,000. The average is about $300, and the most common use of municipal land is for garages or parking structures.
In briefs to councillors, encroachment holders argue that the 100% increase was unreasonable and that the economic value of the land is minimal given that most are reserved and unstable roads.
But in response, council officials said the value of land is determined by its best use and that in certain circumstances it can be extremely valuable.
Peter Steel pays just over $380 a year to the council for his garage, which is partly on a road allowance.
“I get a parking lot for two cars, that’s all. I have to maintain the garage and it needed to be built. And if the council gives me notice, I have to remove the garage in a month,” Steel said.
He said the doubling of fees was a “money grab”.
But not all encroachment owners see it that way.
Mike Mellor said the rates were too low.
“It’s actually a waste of money. The city is missing, I think it’s four or five million dollars a year, which is reasonable rent for places that are occupied.”
Loss of money, or seizure of money, one thing encroachment holders agree on is that the forfeit is arbitrary.
“He assumes that all land in the city has the same value, clearly that’s not the case,” Mellor said.
Council is now considering linking encroachment fees to assessed value.
But Peter Steel said there needed to be a discussion about what a fair charge is versus assessed values.
“Because I invested, the owners invested all the money here.”
The council is also looking at ways to make it easier to sell land to encroachment holders, but first councilors will vote next week on lowering the fee.