Hastings District councillor Wayne Bradshaw says a lack of new housing in the district could be holding back economic development and he has blamed poor planning for it.
However, Hastings mayor Lawrence Yule "completely rejects" the accusation of poor planning for new residential houses.
Mr Bradshaw cites the Arataki, Northwood and Lyndhurst subdivisions, where no sections are for sale, as the evidence.
He said the lack of new housing could be holding back economic development,
"If you are bringing a new business to Hastings/Hawke's Bay, one of the things a business will do is look at where its management will live."
He said poor council planning extended to commercial land.
"On Omahu Rd I know there are some sizeable contracts floating around for redevelopment of land that probably would have happened over the last five years, had the land been rezoned appropriately."
Mr Bradshaw first raised the issue of residential sections not being released to the market late last year and his view was publicly discounted by deputy mayor Cynthia Bower.
Last week the council held a land forum with industry stakeholders to address the lack of residential sections for sale.
Council figures show there are 188 fully serviced/zoned sections in the three subdivisions but the owners have not released them to the market. Of another 85 sites, 10 recently got building consent.
Hastings mayor Lawrence Yule said: "As well as this we are currently undertaking negotiation with two landowners on Middle Rd and in Lyndhurst Stage 2 to bring an extra 140 sections to the market at the beginning of next year.
"I completely reject the comment that we do not plan this."
Developers "typically" held on to land and the council planned on "long run averages".
"If we develop everything at the highest speed the problem is when there is a recession the ratepayers end up carrying the cost of infrastructure, because nobody will pay for it."
In total there were about 250 sections for which the council could do no more to promote development.
He said the only "hiccup" was the abandonment of Arataki Stage 2 at the beginning of the year because of the Te Mata Mushroom odour issue "and we have quickly moved to replace this land and shift infrastructure building in other areas".
Te Mata Mushrooms managing director Michael Whittaker said it appeared the council was "scrambling" to find options.
"Their own expert reports tell them they can't build any closer to the mushroom farm and they shouldn't have built as close as they have," he said.
"The mushroom farm has been there for 48 years so the problem should have been well known to council."
He said there was a big demand for land to build on "and we don't have the supply".
"I think council has been exposed on this, as it relates to Havelock North."
Mr Yule said there was detailed planning work under way for 800 sections in Havelock North, including services, over the next 10 years.
"I also note that we have just issued a variation to rezone 150ha of land for industrial use.
This is to support the surge in economic activity around the horticultural sector and business opportunities arising out of the Ruataniwha Dam."