Claims that Tauranga Council is contributing to the city's affordable housing problem have been rejected by Mayor Stuart Crosby.

Former Tauranga MP and developer Bob Clarkson says home-buyers have to pay more for sections because council needs to recover infrastructure development debts through building impact fees.

'So that means all the young couples, everyone with their first home has got to pay twice as much for their sections just because the council has incurred all this debt.”

Bob's comments come after learning his vision to build 1000 affordable homes in Tauriko is unlikely to be approved for at least 10 years. His plan has been rejected by Tauranga and Western Bay councils, because it is outside the agreed urban settlement area, but both councils have requested it be considered in the SmartGrowth strategic review.

Stuart says affordable housing is one of the city's biggest challenges and building and planning fees were recently cut and will 'continue to make more changes to create more affordability in housing”.

He says there is a 'very real high cost” to providing and operating basic infrastructure to properties in new development areas including water, wastewater management and amenities.

'While we have a goal that growth pays for growth the reality is that new development always has a cost to existing ratepayers and users.”

Bob says high land prices are the reason homes cost so much in the region with land values jumping by 250- 300 per cent when farm land is zoned residential.

'We've got a situation now that nobody is building affordable homes – and after looking at it we realised that the main problem is not the cost of the homes but the cost of the land.”

Bob says his family could make $60 million on the farmland they own in Tauriko if they sell at market value after rezoning, but instead he wants to sacrifice the profit to offer affordable housing. However his plans have not been approved because they are outside SmartGrowth's settlement area.

Stuart says it makes sense to use the infrastructure you have already invested in – including the 'significant investment” in Bethlehem, Pyes Pa, Ohauiti, Welcome Bay and Papamoa and the established areas of Tauranga and Mount Maunganui - to cater for growth before running off to put more in elsewhere.

In recognition of the councils' need to recoup infrastructure costs Bob has dropped plans to organise his own sewage system and will link into the Southern Pipeline. He argues the planning system should be changed so landowners can do any development that is in the city's best interest, such as his proposed affordable housing

'Anything should be possible – that's industrial land, residential land or affordable homes, anything should be possible if it's of benefit to the town.”

However Stuart says such a system would be unworkable, leading quickly to 'chaos on the roads, water running out, pollution into our environment, endless complaints to council about different activities. The key is to achieve planned progress by providing for today and planning for tomorrow”.

Bob is determined to help first home-buyers after seeing how hard it is for many low-medium income earners in Tauranga, saying he is a man on a mission to help stop many first home-buyers being driven to Australia, because the high price of residential-zoned land is forcing home prices up.

'I just want to say sorry to the people of Tauranga who are trying to buy their first home it guts me something terrible. I know there is a huge demand because my daughter keeps getting calls from people who want to go on the list.

'You've got people out there who are spending half their take-home pay just on rent – it's a very difficult situation, we've got to solve the problem.”

In July Bob shared his ideas on affordable housing with the government's Productivity Council which is looking at the problem of expensive housing. He was invited after he announced plans to build 1000 'high quality” homes and section packages for $280,000 in Tauriko.

The cost will also be kept down with bulk buying. Under his plan the affordable homes, another 1000 mid-range homes and 50 high-end homes along the Wairoa River will be built on 'family-sized” 400-500 sqm sections on 200 ha he owns from the Tauriko service station to Redwood Lane.

Tauranga Budget Advisory Service coordinator Dianne Bruin says there is a real need for more affordable housing in Tauranga, with the agency seeing many households in financial trouble who are paying 50 per cent of their wages on mortgages or rents.