The housing area has height restrictions of 9.5m for most of the area, with one section allowing an increase from 9.5m to 17.5m.
The developments did not need to be for low-cost housing, affordable housing or social housing to be approved as a special housing area.
Bluehaven Management chief executive Bill Miller said the approval directly affected hundreds of people such as builders in the area.
"If the special housing accord didn't help us to keep going then people couldn't get access to houses, people building houses and in construction end up sitting around waiting for these approvals. When you look at this area ... you can see the growth. It's good for the economy. In Tauranga, we've led the growth [nationally]."
Mr Miller said the accord helped Tauranga keep up with demand, "and there's a lot of demand".
The new dwellings would be serviced by both existing and new infrastructure including the extension of Te Okuroa Drive, scheduled to be completed on time, in 2018. This will provide an alternative to Papamoa Beach Rd by the time the new dwellings are due to be occupied.
Hawridge Developments director Greg Clarke said the approval was "hugely significant".
"It enables us to finish a few hundred sections so we can supply the market," Mr Clarke said. "The Auckland market is certainly spreading its wings to Hamilton, Tauranga and Mount Maunganui. It's good."
The approval is expected to be finalised in the next month.
Public open day:
* Council will hold a drop-in session on Thursday, February 11, to provide further information and answer questions. Council encourages all interested parties to drop in to speak with council staff, developer representatives and elected members about the special housing area proposals.
* Where: Papamoa Sports and Recreation Centre, 80 Alice Way, Gordon Spratt Reserve
* When: Thursday, February 11, 3pm-7pm