Some housing developers in the fast-growing West Dapto development area will be slugged $25,000 more than others, under a new decision from the state regulator.
Last week, the Independent Pricing and Regulatory Tribunal delivered its final ruling on Wollongong City Council's plan for developer contributions, which are used to fund infrastructure like roads, cycleways and stormwater systems.
Among dozens of recommendations, IPART advised that there should be a net reduction of $27.73 million, or 2.9 per cent, of total costs in the plan - mostly from the cycleways budget - and also recommended that the council should charge lower development fees in the southern-most part of the development area, and pass on higher costs to those building in Stages 1-4.
The latter decision has alarmed both developers and the council, who say home buyers could now face both higher housing costs and delayed infrastructure delivery.
Lord Mayor Gordon Bradbery said he was most concerned that most developers would be paying up to $58,000 to the council for each residential lot, while those building in Yallah and Marshall Mount (Stage 5) would only pay about $33,000.
"Allowing Stage 5 to be an exception is bizarre, because there is going to be demand for infrastructure out there for the road network which will be subsidised by other developers," he said.
The Urban Development Institute of Australia (UDIA) NSW also highlighted the large difference in developers fees across the different stages in West Dapto.
"Depending which end of Marshall Mount Road you're on, you could be paying $25,000 more in contributions than your neighbour down the road," UDIA's southern manger Keiran Thomas said.
The lobby group has called for another independent review of the cost of infrastructure works in West Dapto.
The new costs would make West Dapto was "one of the most expensive places to develop housing in NSW", they said, adding that developers would inevitably pass these costs on in the price of a new home.
The UDIA group had hoped to see $200 million in infrastructure costs scrapped, but said their suggestions for "more efficient" road and bridge designs were ignored..
"With the long-term impacts of COVID-19, West Dapto could have been an opportunity to boost economic recovery in the Illawarra region through a double delivery of more construction jobs and more housing supply," the lobby said.
IPART's recommendations are now with the NSW Planning Minister, who may agree with some or all of the recommendations, and who will direct the council to finalise and adopt the contributions plan accordingly.