Universal Developments’ bid to increase house and land package prices in the Longview subdivision by up to 60 percent has been shot down by councillors.

Instead, in a narrow 6-4 decision, councillors at Thursday’s (September 19) Queenstown Lakes District Council (QLDC) meeting voted to allow a smaller increase of 25 percent to match the cost of inflation in the building sector.

Hāwea Community Association (HCA) committee member Louise Merrall told the Wānaka App the final outcome was “a win for putting the wider community's interests first”.

Universal Developments had asked for increases of around $300,000 for each of its packages.

Two-bedroom house and land packages, it proposed, should be increased from $499,000 to between $799,000 and $819,000; three-bedroom houses should increase from $549,000 to $849,000; and four-bedroom houses from $599,000 to $894,000.

In the meeting many councillors questioned council staff who described the increases as “reasonable”, and asked why market values had informed the recommended increases.

“The developer states they cannot deliver due to inflation in the construction sector and that should be the primary determinant for re-pricing, not market prices,” councillor Cody Tucker said.

Councillor Cody Tucker said the outcome was a win for the Hāwea community and young people looking to get into their own homes. PHOTO: Supplied

“Market prices fluctuate and this development is supposed to be about getting people into their first home at a reasonable price, not renegotiating to ensure there are healthy profits for investors...”

Councillors would not usually have a say in pricing of this kind but the Longview development was approved under the Housing Accords and Special Housing Areas (HASHA) Act 2013, which exists to enhance housing affordability in high-cost areas. 

The 34ha site was classified as a Special Housing Area (SHA) in December 2018, with a deed setting out affordable housing components including fixed-price house and land packages, land resale conditions and restrictions on visitor accommodation.

A clause in the SHA deed provides the ability to amend the house and land packages for a limited number of reasons, one of them being the change in building costs.

Deputy mayor Quentin Smith pointed out that the developer had already had a “reasonably substantial” re-pricing approved in 2021 which increased the prices of the packages by up to $49,000.

In addition, Universal Developments had received a “massive benefit” from the SHA process and it had accepted it had to make some concessions because of that, he said.

The “significant” price increase council staff recommended councillors approve was not acceptable, he said.

Cody said “any increase past inflation is really, sadly, just to justify excess margins and capital gains for the parties involved at the cost of first home buyers”. 

This “further ridicules the objective of the SHA to deliver on affordable housing”, Cody said.

Shortly after this, council staff referred to “commercially sensitive information” that had informed their recommendation and, as a result, the remainder of the meeting was closed to the public.

A QLDC spokesperson told the Wānaka App that councillors eventually approved a 25 percent increase based on building cost inflation, at Cody’s recommendation.

Councillors Barry Bruce, Lyal Cocks, Gavin Bartlett and mayor Glyn Lewers voted against it and the other six councillors endorsed it.

Speaking to the Wānaka App after the meeting, Quentin said during the publicly excluded part of the meeting “it became clear the original prices just would not be delivered”.

“The solution put forward by councillor Tucker seemed to be closer to actually providing affordable housing,” he said. “Sometimes politics requires compromise.”

 “Time will tell as to whether the developer will uphold their end of the deed.”

Councillor Lyal Cocks told the Wānaka App his preference would have been to leave the item on the table for further negotiation and he said changing the pricing “is not as black and white and simple as it may seem or we may like”.

Basing the price on construction inflation since 2021 and not accounting for other factors “leave us open to an uncertain future for this project and a situation we may not be able to defend”, he said.

Meanwhile, Cody said he was “stoked” with the decision.

“I think it's a huge win for the Hāwea community and hopefully more than anything, young people looking to get into their first home.”