Omokoroa will be "the first cab off the rank", for the Western Bay district under the Government's Housing Accord Strategy - with plans for 200 new homes with price tags that start below $350,000.
Western Bay of Plenty District Council strategic planner Blaise Williams said it was in confidential negotiations with a developer but expected they would enter into a heads of agreement within days.
The 17ha special housing site located near Omokoroa Rd and on the southern side of the railway line was predominantly held in three titles with two owned by the council, he said.
About 200 houses would be built on compact sections in the initial stages. Under the special housing legislation twenty-five per cent would be priced under $350,000, twenty-five per cent from $350,000 to $400,000 and the remainder more than $400,000.
The houses would be relatively small but have aesthetic appeal enhanced by landscaping. "We are aiming to provide for a niche market which will allow people that would otherwise not be able to afford to live in Omokoroa to get an opportunity to get into the peninsula."
There were medium to high value homes being built there at the moment and through economies of scale it could provide cheaper homes on slightly cheaper land, he said.
Western Bay of Plenty District Mayor Ross Paterson said it signed the agreement with the Government 12 months ago because Omokoroa had all the infrastructure in place.
It was focused on keeping prices in the whole district level because, "if you get a shortage of supply prices go up and we don't want that to happen".
Industry had indicated there was an interest for smaller sections and homes, he said.
"It is offering a good range of housing for one or two peoples or a retired or professional couple right across to conventional housing for a young family with three children." The council had been proactive to address a need in the region and Omokoroa would be a desirable destination.
"I think it will be attractive so we have been speaking to the education department to say what is happening in order for them to start thinking about future schooling. We have also talked to the New Zealand Land Transport Authority about the Bethlehem to Omokoroa State Highway 2 and the fact it will need to be upgraded as there is already a capacity strain on it in the mornings."
The council was investigating similar projects for Katikati and Te Puke.
"Yes we are still looking at Katikati and Te Puke but this [Omokoroa] is the first cab off the rank.
"There is a real need to provide houses and sections that are affordable as more people move into the sub-regions."