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Paying the price of life in the big city

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  • Paying the price of life in the big city

    Paying the price of life in the big city

    Tuesday July 11, 2006
    By Bernard Orsman

    Average rates bills are going through the roof - with promises of more increases for years to come. Today the Herald begins a three-part series investigating why our rates keep going up.

    The Boyds are a typical central Auckland family.

    Three school-age children. One-and-a-bit incomes. Hamish, an architect, and Paula, a nurse, moved north from Canterbury 15-plus years ago and both enjoy living in the leafy suburb of Mt Eden.

    Like many residents, they have found the value of their partially renovated villa has doubled in the six years they have lived in Esplanade Rd. In that time, their Auckland City rates have crept up from $1227 to $2025 and regional rates have gone from $324 to $549. Water is another $1100 a year.

    Paula Boyd, who manages the household budget, said it added up to nearly $3700.

    "It seems to be an awful amount of money ... but I understand you have to pay a certain amount of money to make the city work."

    Making the city work is a big issue for the Boyds, whose biggest bugbear is the unknown cost of bureaucracy.

    Paula Boyd said she would feel better about paying rates if she knew how much money went in administration and how much went into facilities such as parks and libraries.

    Another issue irking the Boyds is the loss of inner-city sports facilities like netball, which has moved from Windmill Rd to new facilities at Mt Wellington. If daughters Tessa and Alex wanted to get more involved in netball it would mean midweek and weekend journeys across town on congested roads at peak hours. Hamish would like an inner-city mountain bike facility instead of travelling to Woodhill Forest.

    But generally the Boyds are happy with Auckland and prepared to pay extra rates to give the city a bit more edge in the areas of arts, heritage and improving volcanic cones like Mt Eden.

    Hamish: "If you want to have a good city, and I do, you have got to be prepared to pay for it."

    Paula: "It's like your house. You can live in a house that is rundown or you can pay extra to live in a better environment. You can extend that to the city and your rates. Pay a little extra and get a better place to live."

    Mayor Dick Hubbard said when it came to specific projects the council had introduced a range of targeted rates last year. For example, the targeted rate for volcanic cones raised $2.8 million in the first year and would raise a further $3 million this year. Much of this money was earmarked for Project Mangawhau (Mt Eden).

    "I think Aucklanders do buy into the need that we make sure we have the appropriate infrastructure here in Auckland and have to invest in the city if we want it the way it should be for the future," Mr Hubbard said.

    He believed the council had ratepayers' approval to capitalise on the waterfront development at the Tank Farm and upgrading Eden Park for the 2011 Rugby World Cup.

    The mayor was less understanding about the loss of netball facilities at Windmill Rd. He said the move to Mt Wellington was driven by Auckland Netball. He did, however, recognise the need to provide appropriate recreation facilities in the inner city, which has gone from 5000 to 23,000 residents in 10 years.

    Mr Hubbard said it was hard to explain and difficult for the average ratepayer to get their head around the administration costs of a large and complex beast. One explanation given by chief executive David Rankin was that the cost of running the city per head of population had stayed the same since the mid-1990s.

    CV rating 'punishes you for where you live'

    Semi-retired Howick couple Barry and Jewel Wood are facing a 34 per cent rates increase this year.

    But had it not been for Manukau City Council's $300 uniform general charge, that increase would have been closer to 50 per cent.

    The former moteliers, both 55, built their property on Shelley Beach Parade about 15 years ago, and have lived in it for the past five.

    Their rates bill for this year is over $2400.

    "I don't think we should be getting a 34 per cent increase, when the council says the average rates increase is about 5 per cent," Mr Wood says.

    The Woods' rates rises have been "pretty even" for five years, but what has "really messed them up" is the council's change to the annual value.

    Previously, when a land-based value was in effect, there were no big variations in area, Mr Wood says.

    He believes capital value rating punishes residents for where they live.

    Capital value and annual value relies on valuations from Quotable Value, Mr Wood says. Those figures might be accurate in an area where a number of similar houses in an area have sold around the time valuations are upgraded, but large variations have occurred where there are low sales to set benchmarks.

    What hurts is that there are people in Manukau City Council's eastern suburbs just as hard up as in areas such as Manurewa or Papatoetoe, he says.

    Over the years the gap between property values has increased to a point where it is unfair to many.

    "My view is, no residential ratepayer should pay more than, say, 25 per cent above the average rate or the same at the lower end 25 per cent below the average."

    But Manukau Mayor Sir Barry Curtis yesterday said Manukau had one of the lowest rates of any local authority.

    Individual councils did not set the way rates were struck, and Manukau had heard "considerable public input".

    Rates increases would average about 5 per cent, with 85 per cent of Manukau residents paying "similar amounts to last year".
    - By David Eames

    Paying a lot for a 'fairly average job'

    Glendene home owner Russel Thomson is frustrated at the continual rates increases from the Waitakere City Council, which he considers does a "fairly average" sort of job with his money.

    The account manager earns an average income, supplemented by his wife, Gloria, who works as a caregiver at a hostel for the intellectually disabled.

    "I am the main income earner in the family and with three children to support and a mortgage I am struggling to pay the current rates," said Mr Thomson.

    He said his rates went up 9 per cent two years ago, a further 9 per cent last year because his home had increased in value and were due to rise 8.3 per cent this year.

    The bill on his four-bedroom house would be about $1700, which was $350 more than the 2004-05 bill.

    "In addition, I am also paying $220.86 a year to the Auckland Regional Council.

    "It is ridiculous when you also have six-monthly water bills of $260 and $8 a month for rubbish bags."

    Another Waitakere ratepayer, Glen Eden first home buyer Heath Dickenson, said he paid $1267.74 in rates last year and expected this year's bill to be about $1430.

    "I'm happy to pay if the level of service increases by the same amount. Our footpath is in disrepair so I'd expect that to be fixed."

    Gordon Mace of Te Atatu South recalled the council promising to hold rate increases to the level of inflation.

    In the last three years his rates bills were $1545, $1584 and $1756.

    "I have not received my new rates demand yet but with the $41 million needlessly spent on council building in Henderson, I'd be surprised if the rise is not in the region of 25 per cent."

    In North Shore City, households are facing an average 9.5 per cent increase this year.

    In the East Coast Bays, Ken McKay said rates rises were the result of the council's cost-plus mentality.

    "We are making all sorts of purchases that are doubtful, for example the Victoria Theatre, Devonport ($1.55 million), and the Devonport Wharf ($2.9 million).

    "The council are not recognising, or making little provision for those of us on fixed incomes, with big families and big mortgages. We are constantly asked for more money."
    - By Wayne Thompson

    Do you have a question about rates or the way your money is being spent? Email the Herald Newsdesk and we will put the best questions to councils and bring you their answers in our special report Rates on the rise.

    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    At what point do these extra costs start to affect PI? We all build the cost of rates in to our figures, but usually only account for them rising at the rate of inflation and last time I looked inflation wasn't 34%.

    Are rates included in the CPI?