Hamilton city's new development contributions policy has been described as "crazy" by long-term investor, landlord and developer Tom Andrews.

He said large scale property development in Hamilton may come to an end as a result of the doubling of fees.

Development contributions are charged by councils based on the likely impact a development will have on the council's services network and where the development is located.

DOMINICO ZAPATA/STUFF Hamilton architect Brian Squair, and chairman of the Waikato branch of the Property Council.

Andrews has completed several developments in Hamilton and said the hikes in Hamilton City Council development contributions would see commercial developments heading for areas outside the city including Horotiu, Hamilton Airport's Titanium Park, and Matangi - all in Waikato and Waipa districts.

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Hamilton City council growth and funding analytics manager Greg Carstens said the increase was due to a substantial increase in the growth-related capital expenditure in 2018/19 10-Year Plan, and the removal of certain capped charges.

TOM LEE/STUFF Hamilton City Council mayor Andrew King at recent 10-year plan submissions.

In June, Hamilton City Council approved its new development contributions policy, which includes charging for homes based on the number of bedrooms, phasing out the CBD remission across three years, not having any caps on maximum charges.

Mayor Andrew King said ratepayers had been subsidising development under the previous development contributions policy because of the city's "unexpected extreme growth".

The new policy was a huge step towards growth paying for growth, he said.

The new policy was effective from July 1, 2018. Any consents applied for before this date will be assessed based on the previous policy.

Developer Andrews said under the old scheme he paid $1 million in development contributions for a 4000 square metre building for a major transport company in Rotokauri.

Hamilton resource consent specialist Louise Feathers said she had noticed a dampening effect on development activity across the board, and particularly in changes of use and in the development of greenfield land.

"Small businesses looking to establish even in industrial areas cannot afford the development contributions and the developers of large warehouses on greenfield sites, which are planned for tenants, are paying extortionate amounts," she said.

"While the city council has a process for developers to object or seek special consideration, there are no certainties."

Council had exempted developments in the CBD from the charges to boost redevelopment interest in the area.

However, it was now phasing out the exemption in the central city while credits were applied to existing buildings and uses.

Brian Squair, chair of the Waikato branch of the Property Council of New Zealand, said he had anecdotal evidence that new development contribution levels could affect the viability of planned projects.

The new development contributions on current projects made them impractical, he said.

"I think the council is taking a 'suck it and see' position - wait until it has a measurable effect."

The property council did not support the majority of council's proposed amendments due to the likely downturn of growth that may come as a result of these changes.