Published 12 September 2007A paper presented to Auckland City Council’s environment, heritage & urban form committee on 7 September sets out 7 incentive options (numbered 1-8, with 3 missing), with pluses & minuses, to encourage property owners to preserve city heritage rather than destroy it for development.
The proposals are in a report by the council’s city heritage chief advisor, George Farrant. The committee agreed:
a report on incentive options should go to the new council’s direction-setting meeting in Novemberways to enhance the council’s transfer of development rights programme should be investigated during the isthmus & central area district plan reviews, andthe use of financial contributions & other measures as a heritage management tool should also be investigated during those reviews.
Councillors also want to discuss with the Government how to stop destruction of heritage buildings by neglect. The recommendation to find ways of intervening where property owners don’t maintain heritage buildings – either deliberately because they want the site for development, or because they don’t have the money to carry out maintenance – was added to the incentives proposal.
Before considering the incentives report, the committee heard a proposal for a heritage places trust from Hobson Community Board member & council candidate Julie Chambers, but largely ignored her ideas. Mrs Chambers, a Citizens & Ratepayers community board representative who’s shifted to the 1Auckland ticket for the council, is standing in the Hobson ward against Action Hobson councillor & committee chairman Christine Caughey.
Mr Farrant’s options:
Financial contributions for environmental mitigationRates relief (general remissions, differential rating, targeted rates, rates postponement)Grants from a heritage fundLoans from a heritage fundHeritage item emergency contingency fundHeritage property emergency purchase fundEnhancement to the current transferable development rights programme.
He said the first of these proposals, the use of financial contributions:
would offset adverse effects by ensuring positive effects, andwould act as an economic instrument that influences behaviour.
“Note that financial contributions can be used to increase the costs to a developer of demolishing or altering a heritage site. They will thus act as an economic instrument that may tip the economic balance in some circumstances in favour of alternative development sites, and thus could act as a powerful disincentive.
“By acting in this way they may still be effective, even if no ‘environmental tax’ is collected. This might indicate that undesirable development has been discouraged. The problem remains as to what level of ‘tax’ is appropriate. The loss of heritage cannot be measured in monetary terms but must be measured using more subjective measures.
“The use of environmental compensation has been limited in New Zealand, and thus Auckland City would be taking a pioneering role if the council was to refine the current application of the concept in the isthmus &/or extend it to the other sections of the district plan.
“Although the concept will inevitably be criticised vy some as ‘zoning for sale’, it appears to provide a valuable option for dealing with land use conflicts involving developers & heritage, more particularly in relation to natural heritage & ecology. Often in such conflicts the only real options are destruction or unsatisfactory attempts at mitigation, with a resultant loss in heritage.”
Comparatively low capital cost to the councilOpportunity to work collaboratively with owners to achieve creative solutionsProvides chance to achieve mitigation for reduced score (on heritage scheduling scale) due to changesWill act as a disincentive for marginal developments.
Will require plan changes (and thus take longer to introduce)May be open to legal challengeMay be perceived as an easy outIn some cases may require monitoring & management input.
On the use of heritage funds, Mr Farrant said the council offers “the comparatively small sum” of $50,000/year in grants on a contestable basis: “This has meant grants have been on average $5770. The amounts granted have typically represented a very small proportion of both the total project cost & the sum requested. If the fund is increased to $900,000, the average amount can be increased to about $15,000 and the number of grants can be increased to 60/year.”
It’s a tangible carrot to balance statutory sticksIt can achieve good heritage outcomes not possible from regulationIt can encourage increased private investment in the conservation of heritage itemsThe process is highly transparentThe cost can be easily calculated & controlledGrants create goodwill with owners and thus can help avoid costly litigation caused by adversarial relationships with ownersGrants can be linked to actual development &/or maintenance costs.
CostDemand for money may exceed the size of the fund, requiring that worthy applications are declinedThe process can become politicalEffective management is resource-intensive.
Mr Farrant said the current transferable development rights programme, in the form of a floorspace bonus, “suffers from a number of weaknesses, in that it is a poorly targeted compensation mechanism which compensates for loss of development potential which may not exist, and the value of the compensation will only coincidentally equate to the cost of conservation.
“As a result, there is the potential for some owners to receive an economic windfall exceeding their ‘loss’ while others will be under-compensated.
“The current value of these rights is low as a result of supply exceeding demand by a considerable margin. Although in general the current TDR programme can be labelled a success, there are a number of opportunities to potentially enhance the programme, such as:
reduce the supply or eligibility for rights by altering the formulaincrease the incentive to use these rights by recipient sites.
Mr Farrant said this could be done by reducing the number of competing floor:area bonuses, &/or the density bonus: “The 2 main ones to consider are the light & outlook bonus, which is prejudiced towards large sites, and the accommodation bonus….. In Sydney, residential use is encouraged by allowing extra floorspace. However, this extra floorspace can only be achieved by purchasing transferable development rights.”
Other development-right possibilities were to change the rules to sale of transferable development rights no longer relied on a development (raising administrative costs), create a transferable development rights bank (but not a true bank, because the council would enter the market as a buyer & seller).
What Mrs Chambers proposed to the committee was:
an independent charitable trust to assist property owners in protecting heritage characterhave a council-appointed board manage it initially, andprovide it with a $4 million start-up fund & administrative support for its first 3 years.
She said it should help with access to expertise in legal protection means, distribute grants and provide best-practice restoration advice.
“Despite a special targeted rate annually taking an additional $1.5 million/year from ratepayers, funds are short…..
“As each heritage case emerges, the council’s 2 major strategies are to either remove property owners’ rights by punitive regulation, or purchase. Both are costly and often impractical.
“Regulatory action imposes new restrictions on owners of older properties and increases the incentive for pre-emptive destruction.”
Earlier story:7 September 2007: 7 September 2007: Council to consider heritage incentive options in November, trust idea ignored – and councillors want law considered to stop destruction by neglect
Attribution: Council committee meeting & agenda, story written by Bob Dey for this website.