"There's over-competition and demographic changes from families moving out," he said.
"We've heard some real horror stories about rents."
Inspired Kindergartens' board will meet on May 15, when it will consider a report that Mr Monteith said: "may lead to a recommendation either way".
On social media, parents described the news as "devastating", "so sad," "a shame" and "so stink". Other comments praised the kindergarten's staff and services.
Gate Pa rental properties being advertised on Trade Me today ranged in price from $300 a week for a two-bedroom townhouse to $480 for a three-bedroom house.
Parent Tony Davidson said the tight rental market had forced him to move to Welcome Bay. He visited the kindergarten this week to pay his respects to teachers who had earlier cared for his girls, now aged 5 and 7.
"It's a good kindy," he said. "It's sad that it's closing."
A mother who would only give her first name, Lana, said the weekly rent she paid on a three-bedroom home in nearby Greerton had jumped during the past 17 months from $335, to $350, and then to $380.
Her daughter had been going to Gate Pa Kindergarten for two years, and her son started in February. Both children loved being there.
When asked what she would do if the kindergarten closed, Lana said she would try to find an alternative in Greerton or Merivale.
"They're saying it's closing because of the numbers, but they're not taking any more enrolments," Lana said.
"[I think] That means the closure is definitely going to happen."
Mr Monteith confirmed that the kindergarten had turned away at least two enrolments.
"It's because we can't commit to remaining open," he said. "It's not fair on the children."
Deanna Sampson, who has had a son and daughter at the kindergarten, said it was "very upsetting" that it might close.
They're saying it's closing because of the numbers, but they're not taking any more enrolments.
"Both of my children have excelled since starting at this kindy," she said. "The teachers are amazing and it's a huge part of the community.
"It's family-orientated and everyone knows everyone. No one judges anyone and it is very multi-cultural, which is a plus as all the kids treat each other the same."
Tracey Clay, who also had five grandchildren at the kindergarten, said she would be very disappointed if it closed.
"Kids just thrive at that kindy," she said. "There's something different every week, and the kids adore their teachers."
Dan Lusby of property managers Tauranga Rentals was surprised to hear that the kindergarten's roll had dropped, as there was a lot of social housing in the Gate Pa area.
His data showed that rents had risen by about 10 per cent during the past year across central Tauranga areas including Gate Pa and Greerton. A three-bedroom home that cost $380 a week a year ago now cost $400 to $420.
Inspired Kindergartens
Is a non-profit organisation
Runs 21 kindergartens in BOP / Coromandel
Has a roll of 900 across the region
Has a staff of 140
Used to be called Tauranga Region Kindergartens Inc
