In the little over three years since amalgamation average rates on Waiheke have risen from just over $2000 p.a. to nearly $3000 p.a. This will go much higher after capital revaluation despite Waiheke house prices not having risen as fast or as far as many Auckland suburbs. And this is before the Mayor decides on whatever ‘average’ increase he plucks out of the air to pay for the his rising debt.
Under Auckland City Council, Waiheke and Great Barrier were regarded as a ‘special case’ because they couldn’t take advantage of the many assets available in the city that were paid from rates (public transport, motorways, arts centres, swimming pools, street lighting, reticulation, etc etc). Island rates reflected this.
Under amalgamation, this thinking has gone by the wayside for Waiheke, but not for Barrier. Large amounts, in the multi millions, have been pumped into Barrier from regional budgets for just a few hundred ratepayers. Mike Lee has done them proud, but has let Waiheke down badly.
Waiheke has experienced one of the steepest rates rises in Auckland since amalgamation despite the median household income being one of the lowest. The trend is set to continue as the population ages and more home owners live on fixed incomes. Eventually those on fixed incomes will be forced out of their homes as rates alone eat up 15-20% of their income.
Even renters will eventually have to pay more as owners costs rise.
What impact will this have on the island’s demographics? As older residents on fixed incomes move out who will replace them? Will it be absentee owners or wealthier retirees or more commuters? Or will it be a more transient population looking for cheaper rentals than available in the city?
There is, of course, a much bigger question. As home ownership continues to fall nationally and the population ages, is a property tax the fair and equitable mechanism to pay for Council services?