Tauranga has been added to the Government's affordable housing legislation in a move Tauranga City Council was told about, but hasn't yet had a chance to discuss with the Government.

Tauranga City Mayor Stuart Crosby, who has been talking about the Government's move this week, says he's been warned of the impending legislation but doesn't know much more.

Photo: file.

'I haven't seen it, but the Minister [of Housing Nick Smith] did give me a courtesy call two weeks ago to say Tauranga and other councils were going on the schedule for special housing zones,” says Stuart.

'Our issue is we weren't engaged in that process; and we don't understand yet what the consequences could be. But, in saying that, I'm personally happy to work with the Government on the issue.

'At this stage, we don't have any information to really make a comment.”

The Tauranga City and the Western Bay of Plenty District council are among Christchurch City, Wellington City, Hutt City, Upper Hutt City, Porirua, Kapiti, which are being added to the Housing Accords and Special Housing Areas Act.

'This is a first step,” says Housing Minister Nick Smith. 'The issues in each city are different and will not automatically mean replicating the Auckland Accord's focus on fast-tracking housing developments.

'We want to get officials from Government and council working on identifying the barriers to supply and affordability of housing; and then putting in place whatever steps are needed to make improvements,” says Nick.

'I am encouraged by the initial response from mayors and councils. There is broad agreement that homes have got too costly in these areas; and that the Government and councils need to work more closely together to get house price inflation down.”

Stuart told councillors at Wednesday's meeting the housing accord means the Government can tell councils where to build houses and how many – 'whether they like it or not”.

Nick Smith says the major housing challenge in Tauranga and the Western Bay is managing projected population growth of 64,000 people during the next 20 years, which will require an additional 1300 homes per year, while only 800 per year have been built during the last five years, which he says contributes to high house price inflation.

'The Government and councils favour a coordinated approach across both districts to address supply and affordability,” says Nick.

The figures come from the SmartGrowth strategy; the ongoing growth management study conducted by Tauranga City, Western Bay of Plenty District and Bay of Plenty Regional councils.

'My personal view is we as region, and sub-region; we have pretty robust planning for housing through SmartGrowth,” says Stuart. 'We will just have to work with government officials.

'That's the first step. They are going to work with us so they have a clear understand what the opportunities are for housing.”

Housing growth has slowed in recent years but is now picking up again, says Stuart.

'It's market driven. We tend to go through cycles of rapid growth, it slows down but it's picking up again now. Last month, for example, we did 76 house permits; and that's been reasonably consistent over the last six months. Clearly, we are in a phase of more residential growth again.”

The key issue Stuart says he wants to talk with the Government about is paying for lead infrastructure for growth. It costs millions to install water mains, sewers etc for new developments, a cost traditionally paid for with money borrowed by councils and paid back by developers. Where growth slows, after the infrastructure has been installed, it can leave the ratepayers servicing interest bills on multi-million dollar costs – as happened to Tauranga ratepayers with west Bethlehem a couple of years back.

'We're a growth region; we are managing growth,” says Stuart. 'Our constant tension is how we fund lead infrastructure for growth – and I would like to engage with the Government on that issue in particular.”