The proposal is now with the regulator and if the Independent Competition and Regulatory and Commission gives it a tick, the $1200-a-head levy will apply to all new developments.

The calculation is a little complicated, but in short, a townhouse is calculated as 2.5 people (2.5 times $1200 equals a levy of $3000), an apartment as two people ($2400), and restaurants, shops and the like as fractions of that.

The upshot is a development of the size of the planed "Lyneham on Northbourne", replacing public housing on the Lyneham side of Northbourne Avenue, would face a $1.2 million bill for 500 apartments plus more for its commercial space (about $360 for each new worker) - minus the number of people already accommodated on the site.

But Icon Water is now offering to phase in its scheme, so developers who buy land before July 1 this year will not pay, as long as they lodge their development applications by July 2019.

That should exempt JW Land, which bought Lyneham on Northbourne, and Johnny Roso's Art Group, which bought Dickson on Northbourne on the other side of the road. It will certainly provide an incentive for both not to drag out their development applications too long.

Icon Water gave the example of a 120-apartment development on the Kingston Foreshore with 150 retail workers and 500 seats in restaurants and clubs, which will face a charge of $402,000. Again, given the last major block at the foreshore has recently sold - the arts precinct sold to Geocon - that example is hypothetical only.

The housing industry argues, with not a little logic on its side, that the cost will be passed directly on to home buyers, and will hit first-home buyers hardest, because they're the kind of people buying one and two-bedroom apartments.

Icon Water says it needs to raise $180 million over 20 years to upgrade existing infrastructure in "brownfields" areas where the ACT government wants to encourage infill - this levy doesn't apply to the new "greenfields" suburbs on the fringes. Icon says it will fund half and the rest will come from the developer.

Accepting it has to find that money, it faced the choice of levying developers or hiking water and sewerage bills. It chose the former.

But some in the development industry have argued, again an argument not without some merit, that an adequate water and sewerage system is a cost that should be borne by the entire community, not simply by developers - or buyers.

Icon's original idea was a baffling proposal to charge developers in just four precincts - Woden, Belconnen, Fyshwick and the inner north. Woden developments were to pay the most, a charge of $3000 a head. Inner north developments were to attract a charge of $1800 a head, with less in Belconnen and Fyshwick. This proposal was argued as fair because it apportioned the costs to the areas where the money needed to be spent, but it was flawed, not only for the impost on Woden, which is already struggling to attract development, but for the exemptions it provided for the inner south and many other parts of the city.

The new proposal is more simple and more fair, at a flat $1200 no matter where you are building in existing suburbs. But it is still a significant impost on developers and apartment buyers. Whether it convinces the regulator is yet to be seen.