A proposal by the Christchurch City Council to continue paying out millions in development contribution rebates to residential property developers in the inner city is being described as “socialism for the rich.”

Keep Our Assets spokesman Murray Horton says the Christchurch City Council has already paid out $12.9 million since 2014 (an average of more than $12,000 per residential unit) and is proposing to pay out a further $7.1 million in ratepayer money into the pockets of some of the wealthiest people in Christchurch.

Central city development contributions rebate schemes were established to encourage post-earthquake redevelopment in the central city.

In the latest council agenda, a staff report written by Principal Advisor of Economic Policy, Gavin Thomas, says “the rationale for having the rebates funded from rates is that there is considered to be community-wide benefit from a vibrant and successful central city and it is therefore appropriate for the wider community to fund the rebates.”

Gavin Thomas,says “there are also significant rates revenue benefits for the Council (and other existing ratepayers) from increases to the capital value resulting from new developments in the central city. Our analysis has shown that these benefits outweigh the cost of the schemes within a relatively short period.”

Mr Thomas recommends extending the scheme. “Both rebates schemes are considered to be well-aligned to the Council’s central city strategic outcomes around increasing the residential population and encouraging urban regeneration.”

The residential rebate scheme was strongly supported by developers and is seen “as a significant enabler in the provision of affordable central city housing – consistent with Council strategic objectives for central city residential living.”

“Although the scheme itself does not result in lifting the development margin, it does assist in making the end-product more competitively priced,” says Cr James Gough, Chair of the Central City Momentum Working Group.”

“Rebating a development cost such as development contributions has proven to be a useful lever in assisting with the viability of Central City residential when we need it most.”

However, Murray Horton says where is the Mayor’s “laser-focused” determination to save ratepayer money?

He is also asking why has the Chief Executive signed off on advice to Council which rewards property developers while Council services face the prospect of harsh cuts.

“It seems the Mayor and Chief Executive are allowing wealthy property developers to get their sticky fingers into ratepayer wallets before hard decisions about spending cuts elsewhere are made.”

“It beggars belief that ratepayers are being asked to subsidise Airbnbs (which some residential properties become) in the central city when the Council faces a monumental struggle to keep rates increases to 0%.”

This “socialism for the rich” must be stopped on Thursday.