The council proposes to keep the underlying rule of one house per 40ha but to force the houses into clusters of at least 10 lots per cluster. Each lot would be no bigger than one hectare.
It would result in 7 per cent of the forested side of Matakana being taken up by clusters, allowing better evacuation and protection from hazards such as fires and tsunami.
Carrus is in a Scorpian joint venture with the Faulkner family, which owns 170ha of the forests - most of it on the southern coastal side of the island. It wants to give land owners the discretion to exceed the one house per 40ha rule, which would permit 102 house lots to be created. It is seeking a maximum of 200 house lots.
Counsel for Carrus Vanessa Hamm said there should be flexibility in determining the scale of rural lifestyle clusters in suitable locations.
Carrus said there was a disparity between papakainga marae housing development intensity and development intensity on the forested side of Matakana, saying it unfairly restricted development for the forest land owners.
While Carrus agreed with the council's intention to stop houses being scattered throughout the forest, it argued that subdivision should be allowed for farming lots provided there was no dwelling.
TKC Holdings said the council's approach to subdivision was overly rigid and would result in something more akin to an urban area. It said the clustering would likely require mass deforestation, communal wastewater facilities and a "peri urban feel".
TKC said forestry needed to be a permitted activity to give owners greater certainty than having to rely on existing use rights. It also feared that the rule banning development in areas with significant ecological features would impact on all their blocks because each had significant ecological notations on the plan.
It criticised the plan's objectives for Matakana Island, saying it was more of an abstract statement than something to be achieved under an RMA framework. Among the wording it sought to remove from the statement was "unique way of life" and the word "rich" from "rich cultural values".
Blakely Pacific argued that the plan constrained development inappropriately.