Hamilton City Council told developers in 2023 it would not be able to approve resource consents for developments in some areas because its wastewater system could not keep up with demand. Photo: Hamilton City Council

Property developers say the supply of new housing in Hamilton is being constrained by a council decision to block development in areas where water infrastructure is under pressure.

Hamilton City Council told developers in 2023 it would not be able to approve resource consents for developments in some areas because its wastewater system could not keep up with demand.

Since then, it has told nearly half the 1600 queries it received about building developments on brownfield sites that there would be wastewater constraints and none of them had progressed to being developed.

Property developer John Kenel said this is the first time in two decades that he had not had any property under construction in Hamilton.

He told RNZ’s Nine to Noon he had a number of sites affected. One was in Five Cross Roads, which he said Hamilton City Council had indicated was a key area of intensification.

Kenel said he had intended to build 17 two-bedroom townhouses on the site and had carried out due diligence before buying the land. He had a pre-application planning meeting with the council where there was no mention of infrastructure capacity constraints, he said.

“That was never a thing until mid-2023. The first I found out about it was when the consent was declined.”

At another site near Waikato Hospital, he bought land intending to build townhouses – but was currently stuck with a vacant site.

He said developers were now in a position where they had to approach the council about each individual site and chase for a response about whether it would be affected.

“We need much better communication…. One of the reasons I’m so frustrated is the trust has been completely broken. I’ve been working in the city for 21 years and built over 1000 homes now.

“I need to buy land further and further in advance because the consenting process takes so long. When we’ve put in the consent to be told out of the blue that we can’t develop, we’ve got all this land tied up, we’re paying rates and can’t move forward… it’s less housing for the city.

“As a developer, as a business owner, how can I justify investment in the city when the risk is so high and there is so much uncertainty?”

Hamilton City Council general manager of infrastructure and assets Andrew Parsons said the council acknowledged it needed to communicate better.

“All the areas we’re talking about are quite old. Some from the ’50s and ’60s, some much much earlier. All the infrastructure in the ground is sized for the development of the day. The capacity incrementally gets eaten up as we get infill and intensification.”

He said the city was not trying to block development, and the council had set aside $1b for three waters over 10 years – but that would involve big projects that would take time to roll out.

“This is a NZ inc issue. The previous government signalled there was $185b underinvested in three-water infrastructure across New Zealand.”

He said in the last four years there had been 170 instances of waste water overflows in Hamilton which had spilled an estimated 10,000 cubic metres into the environment.

Some areas needed to be prioritised over others, he said.

Sarah Thomson, councillor and chair of the strategy growth and district plan committee, said changes such as those the developers had experienced could have an impact on people’s confidence.

Hamilton City Council. Photo: Hamilton City Council

“Right now my focus is, how do we move forward and enable people to build houses in these parts of Hamilton where people do want to live and want to buy houses?”

She said an interim solution could be to use holding tanks that stored waste water and released it into the system in off-peak times. This would only be appropriate if there were plans for new infrastructure within the next 10 years, she said.

“They should only be interim solutions. But being more open to innovation could provide some relief in the meantime.”

She said there were decisions to make around risk which would require balancing different outcomes that were desirable for the city.

“We can never see anything in isolation. Having massive wastewater constraints on a third of the city, we’re also stymying housing supply, having an economic impact on the city – it all needs to be weighed up when we are considering our approach to ensuring compliance and looking after our river.”

She said a council-controlled organisation had been proposed to work with neighbouring councils to develop infrastructure faster and more affordable.

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