Two Labour representatives in Tauranga this week believe a Housing Accord is not the key to unlocking the city's housing crisis needs.

A recent international housing affordability study rated Tauranga as the second-least affordable place to live in New Zealand.

Labour candidate for Tauranga Rachel Jones and Labour spokesperson for housing Phil Twyford believe they have the key to unlocking the city's housing crisis needs.

Labour candidate for Tauranga Rachel Jones and Labour spokesperson for housing Phil Twyford say Housing Minister Nick Smith's ideas to fast track housing developments with a Housing Accord is the wrong tool for the job.

Phil says this is because the Housing Accords and the Special Housing Areas Act basically applies to Auckland, where he says there is a problem of land supply shortage.

'But in Tauranga that's not the case, there isn't a land supply problem here…for that reason the accord is not going to do the job that's required.”

He says the Housing Accord is a political response to the problem, not a practical response.

Labour plans to help the housing issue with its main policy ‘KiwiBuild' – aiming to build 10,000 affordable homes and sell them to first home buyers.

'Most of those new homes will be built in Auckland and Canterbury where you've got the largest population and high levels of unaffordability. But actually Tauranga is up there as well.”

Although Phil couldn't give an exact number of how many homes will be built here, but he says there will be a significant number of KiwiBuild homes built in and around the city.

Phil says Labour plans to essentially create a ‘revolving loan fund' of $1.5billion that will be spent across a 10-year period – and is cost neutral for the tax payer.

Every time a new home is sold to a first home buyer, Labour proposes to reinvest the proceeds back into the fund to build another house.

'Building at that scale will allow us to drive down cost. Under KiwiBuild, building at that scale of 10,000 a year will enable suppliers to essentially invest in factories that will factory build the component parts of the house.

'Then it's higher quality at a more affordable cost and basically then the components get flat packed onto the site and put up in a matter of days.”

Phil says a recent study by an industry group estimates this approach of offsite manufacturing could knock $32,000 off the cost of a new standard home.

According to Phil, one of the issues driving up house prices and putting them out of reach of first home buyers is property speculation.

By bringing in a Capital Gains Tax that excludes the family home it will take some of the 'speculative heat” out of the market, says Phil.

Another feature in Tauranga contributing to housing affordability in Tauranga is the use of covenants by developers, says Phil.

'There are houses being built but very, very few are affordable for someone who is earning the average wage.”

Phil estimated the medium house price for Tauranga is $360,000, meaning residents would need to save a $72,000 deposit on average budget to make a deposit on a home.

Labour proposes the benchmark to build KiwiBuild homes in Tauranga will range from $250,000 to $300,000, costing below the medium house price in the city.

Although Phil knows that is not going to solve the problem for everybody.

'There are other approaches that will be needed. One is that Labour will build more state houses to provide that decent quality housing to provide that safety net.”

Phil also understands many rental properties are cold and damp and Labour plans to set minimum standards for warm and dry rental homes.

'We're going to change the law so that every rental property has to be insulated and have an efficient and effective heating source.”