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Auckland developer fined $74,000 for over-charging affordable homes at Hobsonville Point
October 20, 2020
An Auckland housing developer has been fined $74,000 for charging affordable home buyers extra for landscaping and driveways at Hobsonville Point.
Imperial Norwest was fined $30,000 and Imperial Garden $44,000 by District Court Judge David Kirkpatrick after the companies pleaded guilty to charges of breaching the Resource Management Act, brought by Auckland Council.
They were given consent to build affordable homes at no more than $636,000 under Special Housing area rules but then charged the first home buyers extra for things like landscaping and driveways.
That pushed the homes well outside affordability criteria.
The companies have also refunded nearly $400,000 to home buyers on council’s request and separate to the court action.
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Auckland Mayor Phil Goff was pleased with the ruling, saying the point of the affordable housing legislation was to bring more affordable homes to the market to address housing challenges.
“These companies have deliberately attempted to circumvent the rules and have admitted their guilt, so it is appropriate that this sentence has been handed down,” he said.
Councillor Chris Darby, who was approached by homeowners about the pricing, said the judgment serves as a warning to unscrupulous developers that the council will throw the book at them.
In September last year, a director, Andy Zhu, said he wanted to avoid court and was planning to repay the homes owners affected.
The company had been acting on legal advice that “affordable” applied only the house itself, nothing else, so thought it was entitled to charge extra, he said.
The first complaints were made about two years ago.
Special Housing Areas were created by the previous National government to increase the housing supply, with developers given fast-tracked consents in return for providing some affordable homes for first-home buyers.