The Property Council claims that relying on rates to pay for new infrastructure is stifling development.

At its annual conference, Local Government New Zealand has argued councils shouldn't have to rely on property rates and should be able to raise revenue by other means.

But the government says the rating system works and the problem is wasteful spending.

Property Council chief Connal Townsend said relying on rates to cover the cost of development means developments take longer than they should.

"Development just becomes deeply irritating for them, as they've got to struggle to constantly find finding to put infrastructure in place," Townsend said.

"Local Government should not be disincentivised for doing the right thing which is encouraging jobs and encouraging economic growth."

Local Government Minister Paula Bennett told the local government conference that while amalgamation might not be happening, there still needs to be change.

Hutt City mayor Ray Wallace remains staunchly anti-amalgamation, but acknowledges adjustments are on the way.

"She wants us to be working together as a region to lift the performance - I think we're all in agreement with that. We are working on opportunities of working closer together, working more collaboratively as a region and I think that's all positive."

He said the Wellington Region Mayoral Forum has agreed to look at ways councils can share services, and be more efficient.

"Potentially a new transport entity and a roading entity for the entire region. These are all positive things that the councils have committed to working on."

Tauranga's Mayor Stuart Crosby wants to make sure homes are still affordable as the city grows and will work with neighbouring councils and local iwi to determine where to put people and infrastructure.

"When a place becomes popular the prices do go up, so we are working in that area as well."