A special housing area developer's decision to charge extra for landscaping - like driveways and paths - on affordable housing looks like a breach of the intent of the law, a senior Auckland Councillor says.
The developer claims the driveway and other parts of landscaping are not part of the "dwelling" and therefore not included in the affordability cap. (Stock photo) Photo: 123rf.com
Imperial Homes has been charging affordable home buyers in the Scott Point Special Housing Area up to $48,000 extra for landscaping - including in some cases driveways - pushing the total price outside the affordable range.
The developer said it was well within its rights to charge for the landscaping because the affordability criteria, by law, applied only to the building itself.
All of the affected Hobsonville buyers were purchasing their first home - so didn't always know what was normal practice - but one who RNZ agreed not to name said alarm bells rang when he realised there were two bills for the home.
"When we asked why that was above what we understood was the affordable housing cap, we were basically told it was split into two prices.
"We had to pay, you know $630,000 and then an extra $48,000 for the landscaping, driveway, fencing, all those other variations that apparently ... weren't being included in the house."
The council's planning committee chair Chris Darby has ordered an urgent investigation into the extra charges, and said it looked as though the case was a breach of the intent of the Special Housing Area law.
He's called for a comprehensive investigation across many different areas of the council.
"What we see now - after they [Imperial Homes] received considerable financial benefit through fast-track processing - is they appear to be extracting themselves from that responsibility of passing on a fully affordable product.
He said the council wanted to hear from more buyers who may have been affected.
"I'm confident that we have got things in train to investigate this absolutely thoroughly and I'm determined that Aucklannd council will be doing that.
"If there is enforcement action to be taken then we will take that action.
Imperial Homes, through its lawyer, said it has done nothing wrong because the Special Housing Area legislation uses the word "dwelling" when talking about affordable homes and defines "dwelling" as a building - or part of one - that's fit for people to live in.
It said that meant the affordable home criteria referred only to the house and it was entitled to charge for more.
However, the buyer RNZ spoke to said red flags were raised the second they showed it to their laywer and bank manager.
"Both of them ... our bank manager said he's never seen anything like this or any deal structured like that."
The buyer said he continued to dispute the extra $48,000 being asked for and while he eventually paid significantly less it was still more expensive than the affordabililty cap.
He said that by then he just wanted to move in.
Other buyers spoken to by RNZ said that while they were pleased to hear the council was investigating, as they had been underwhelmed by its efforts so far.