Ōpōtiki District Council has had to rethink its plans to develop infrastructure in Hukutaia after being unsuccessful in its application to Kainga Ora's $1 billion Infrastructure Acceleration Fund.

Mayor Lyn Riesterer says development of the more elevated land at the south of town is necessary for the long-term future where the town can expect sea level rises.

Not everyone is disappointed, however, with Councillor Barry Howe saying at a meeting on Tuesday that he was 'quite chuffed” that Ōpōtiki had been turned down for the funding as many people had been against the development during last year's long-term plan consultation.

In a report to the council this week, chief executive Aileen Lawrie provided an update on the matter. The Infrastructure Acceleration Fund received more than 200 applications from councils, iwi groups and developers for funding of over $5 billion.

Ōpōtiki's application was one of 80 that made it to the second stage of the funding process, but the council learned in a letter from the fund's project director Andrew Brown, sent on May 16, that it had not been successful.

The funding would have enabled infrastructure including roads and three waters services that would have enabled 1700 lots to be developed long term.

A briefing on a new proposal for developing the area has been put together and sent to East Coast MP Kiri Allan requesting her support in continuing to seek central Government investment.

The briefing said it was essential to meet the town's acute housing challenges and to allow for a managed retreat from low-lying areas of town.

The council consulted on the development in last year's long-term plan and a number of landowners noted they were interested in developing their land for housing. However, there was also significant opposition from residents at Hukutaia.

The new proposal has a first stage that would see 484 homes constructed at the northern end of the neighbourhood. The initial infrastructure build-out provides core three waters and transport infrastructure to enable this stage to proceed.

Later stages, which include a further 1400 to 1500 homes in the south and west of the development area will be self-funded from the development contributions.

The lowest estimates for minimum infrastructure would require $30.8 million against total long term plan funding of $6.4 million from ratepayers. The servicing cost on the additional debt would amount to a 2.5 percent rate increase.

'Developing the essential three waters and transport infrastructure for Hukutaia is beyond the capability of Ōpōtiki acting on its own. Ōpōtiki is therefore requesting assistance to maximise the investments already made by Government, iwi and the private sector,” the briefing to Ms Allan said.

In the report, Ms Riesterer stated that the council would continue to seek funding for transport through the National Land Transport Programme.

'We have changed our approach to stormwater to make it the responsibility of developers, which in turn is likely to impact the affordability of new homes in Hukutaia.”

Councillor Barry Howe said affordable housing was better off 'down on the flats”.

'It was always going to be a burden on our ratepayers. When we did our public submissions, the vast majority of Hukutaia people and dairy people didn't want any part of it. It went against the grain a bit there, but at the end of the day, it's back where it was at the beginning.

'I wasn't chuffed about the amount of money we spent on the application, but now I think we can redirect ourselves into housing that people can afford. They wouldn't have been able to afford these. I'm talking about our forestry workers, our truck drivers, our kiwifruit workers. In my personal view, that's where our focus should be.”

Councillor Louis Rapihana disagreed.

'I understand what you're saying about affordable housing Barry, but we can't build down here anymore.”

Ms Riesterer said the council needed to be looking ahead to the next 30 to 50 years.

'That is really coming through with the Climate Adaptation Bill that is being formed at the moment,” she said.

She said the emphasis now around climate change was in ensuring that the resilience of what infrastructure was built, was going to be climate change-proof.

'We are probably going to get to a point where we are unable to service [some parts of town] unless we've got amphibious houses. We will get to that point. Not in our lifetimes, but we're planning for the future. I think that's quite important.”

The council voted to receive the report, with Councillor Steve Nelson abstaining due to a conflict of interest.

-Local Democracy Reporting is Public Interest Journalism funded through NZ On Air