The planned new urban development area of Te Tumu in Papamoa East is expected to provide homes for 8000 to 14,000 people over the next 15-20 years, according to people involved in the development.
The planned new development - supported last month by the Smart Growth Implementation Committee to go forward for ratification by the region's councils - is expected to feature the more dense urban housing model being encouraged by town planners.
Michael Tucker, Tauranga City Council's manager - city planning & growth, said that as Tauranga grew and changed, there was a greater proportion of people demanding a mix of housing types, but notably fewer standalone dwellings on large sections.
"Generally, we're looking at options for more compact forms of housing right across the city both in terms of existing urban areas, but also in greenfield projects including Te Tumu," he said.
Scott Adams, managing director Carrus Group, part of the Te Tumu Landowners Group which controls a large landholding in the Te Tumu block, said Te Tumu was crucial to Tauranga's urban growth strategy.
"Without that land, Tauranga's housing shortage problems will continue to get worse."
Structure planning and rezoning for Te Tumu - originally conceived by Carrus as a lifestyle development - will begin in the current financial year and is expected to be completed by the end of 2018, with the first houses being built from 2021.
"This plan change in my view should have gone through several years ago to cope with the demand we are experiencing today," said Mr Adams.
The current plan change process would be council-led in collaboration with Te Tumu landowners, he said.
"We've always maintained we will be doing what Carrus has always done best - residential lots around the 15 lots per ha target," he said. "But we want flexibility so that if the market calls for smaller or larger lots, we can change our resource consents and subdivision plans accordingly."
Peter Cooney, group director of CBC and Classic Builders, which works with Carrus on developments, said that as land prices increased in Tauranga, intensification would continue.
"The cost of land and construction, along with council and government policies, have pushed our house sq m rates to record highs and the only solution is for smaller, well-designed homes with good urban outcomes, providing high levels of close proximity to amenities while having easy access to the work and central centres."
TCC senior policy planner Campbell Larking said Te Tumu offered the opportunity for a significant new provision of housing.
"It is housing right along the coast. It has a river and will be built around a town centre and off a state highway interchange. It will be quite a unique element that can provide a significant change in the way we provide growth."
On Thursday Western Bay of Plenty District Council adopted a number of Smart Growth Implementation Committee's resolutions which included agreeing that Te Tumu should be retained as one of the next urban growth areas.
Council also gave the green light for Smart Growth to work with its partners to refine the current structure planning approach to ensure it complied with the Government's National Policy Statement for Urban Development Capacity due to be finalised next month.
• One of four development areas supported last month by the Smart Growth Implementation Committee to go forward for ratification by the region's three councils.
• The others are Tauriko West, Keenan Rd and Tauranga City.