City of Kwinana charging developers extra $31 million because of rising land values and infrastructure costs

Residential developers will have to cough up an extra $31 million to build within the City of Kwinana.

An annual review by the city found developer contributions would need to increase by more than $31 million from the 2022 report, because of rising land valuations and infrastructure costs.

The reviews were into eight of the city’s 15 developer contribution areas, with the biggest increase of $4.5 million coming from area one, which comprises Bertram, Wellard and parts of Parmelia and Orelia.

Costs across areas two to seven — which encompass Casuarina, Anketell, Wandi, Mandogalup and parts of Wellard and Bertram — will jump by $26.7 million.

The city seeks financial contributions from developers for infrastructure including public open spaces and roads in emerging areas.

Councillors endorsed the report at the December 13 meeting, despite a deputation by a representative of Ascari Developments, which owns Tamblyn estate in Wellard, which slammed the costs as unfair.

Fred Ferrante said the developer contributions were based on a traffic modelling report from 2018 that contained “a number of major modelling errors and future traffic projection errors”.

He said this resulted in a “disproportionately high contribution rate being levied against Ascari’s subdivision in Wellard”.

According to Mr Ferrante, Ascari’s 2022 contribution rate was $10,800 per lot compared to $2440 payable by neighbouring Oakebella estate developers LWP Group, now being delivered by Satterley, and higher than other developers that generally paid $8000 per lot.

He blamed the higher rates on “incorrect assumptions” of traffic generated with the city using traffic data to split infrastructure costs between developers, and unsuccessfully urged the city to defer its decision until after updated traffic modelling, saying it was “not a hard task”.

Mr Ferrante said Ascari had lodged an objection with the city about the 2022 contribution rates that remained “outstanding”.

City development and sustainability director Maria Cooke said major reviews, which would update traffic data, were required “roughly” every five years but had not occurred because the city had been progressing a community infrastructure amendment that would impact the developer contribution areas.

“It would be premature for us to undertake a major review of those DCAs until amendment 145 was completed,” she said.

Ms Cooke said a report on the amendment would front councillors early next year and a major review of the developer contribution areas would follow, where they could make adjustments in “full consultation with all the stakeholders”.

The report by city staff attributed the increase in costs to “annual escalation of land valuation, landscaping improvements and road construction” which included electric, light and power costs.

It listed the biggest changes in area one as an increase of $2.6 million for construction of Wellard Road from Bertram Road to Cavendish Boulevard, and an additional $1.48 million to extend the road from Cavendish to Millar Road.

In areas two to seven, the biggest increases stem from creation of the Casuarina public open space — costing an extra $3.5 million because of “landscaping/improvement costs escalations” and increased land valuation, and an additional $3.7 million for the Anketell north open space, also attributed to the higher costs of landscaping and improvements.

The report said the city engaged an independent agency to review land values and sought updated costings for land, infrastructure and landscaping.

It attributed the increased costs to a rise in construction costs, skilled labour and material shortages and “competitive tension in the supply chain”.

“Costs have increased across all areas with roads and road landscaping increasing, on average, by a combined total of 12.7 per cent,” the report said in relation to developer contribution area one.

Chief executive Wayne Jack said the changes in contribution were predominantly paid for by the developers but a portion was attributed to the city.

“Once the cost apportionment schedule is adopted by council, the rate payable is adjusted and is the rate that is paid for any new development from the time of adoption,” he said.

“The rate is reviewed annually to ensure that cost changes are reflected.”