The Tauranga Community Housing Trust is welcoming a $1.7million cash injection from the Government to help develop an age-friendly affordable housing village.

The grant is part of the Government's latest $16.4million funding round announced yesterday, towards building affordable social housing.

Tauranga Community Housing Trust manager Chris Johnstone at the Clarke Street site for the proposed 14 unit redevelopment.

Tauranga Community Housing Trust will put the grant towards the development of 14 purpose built units – eight one bedroom and six two-bedroom units, totally 20 bedrooms, for people of mixed ages and abilities.

Trust manager Chris Johnstone says the development on the existing Clarke Street site will begin in the next six months, and is crucial in helping the trust ensure more housing needs are met.

'They will be for people with low incomes who have a housing need.

'There is a lack of appropriate rental housing, particularly at the lower end of the market, a poor supply of accessible housing, a general shortage of social housing in the Tauranga area and high demand for HNZC housing.”

Chris says there is a general decline in home ownership with Tauranga one of the least affordable areas for buying a property in New Zealand. She says the average house prices in the area are 6.6 times higher than the household's annual income.

The 14 unit development will produce an 'integrated age-friendly village”. The eight existing one-bedroom units will be relocated on to a suitable site in the Western Bay of Plenty.

'We are so short of one bedrooms and we are very keen if we can and if it's feasible to relocate and reuse them because we can't afford to lose them.”

At least 50 per cent of the homes will incorporate universal design features including being fully wheelchair accessible.

Tenants will pay a social rent of about 80 per cent of market cost.

Tauranga Community Housing Trust chairperson Kate Cosgriff says the grant is vital to improving housing affordability in Tauranga.

'This is great news for Tauranga, particularly given the housing affordability issues in the city and we wish to acknowledge the support of the Social Housing Unit.

'There is a significant under-supply of affordable smaller homes such as one and two bedroom dwellings and a high demand for such rental accommodation. This medium density development will be well-designed, provide stability and security for our tenants and will be priced affordably.”

Other grants will go towards housing projects in Auckland, Northland, Hamilton, Wellington, Canterbury and the Bay of Plenty.