Tauranga developer Bob Clarkson is lobbying to have Tauranga housing declared unaffordable.
Mr Clarkson has challenged authorities to rezone land he owns in Tauriko for residential development in affordable housing.
Auckland is the only region identified by the Housing Accords and Special Housing Areas Bill as having housing supply and affordability issues.
Yesterday, Mr Clarkson urged Tauranga City councillors to file a submission to Parliament so Tauranga could be recognised alongside Auckland as an area where houses were grossly unaffordable.
The average price of a good quality home in Tauranga was unaffordable for many first homebuyers, at six-times the average wage, he said.
"Tauranga has a major affordability problem... and this is a terrible situation to be in and it's no wonder rents are going up. This city will die if we don't do something about the cost of houses."
Ross Stanway, chief executive of Realty Services, which operates Bayleys and Eves, said there would always be people who could not afford their first home.
"I think that any project that goes on to provide a good selection of well-priced houses, provided the demand is there, and that's up to the developer to assess, then I think it's a good thing and any region would want the same thing."
Greg Purcell, of Ray White Mount Maunganui and Papamoa, said the issue of housing unaffordability was not new and Tauranga was an expensive place to live compared to other centres such as New Plymouth and Gisborne.
The median house price in Tauranga last month was $327,500, according to the latest Roost Home Loan Affordability Report. This was down $20,000 (5.6 per cent) on the previous month and down $15,500 (4.5 per cent) on the same time last year.
Meanwhile, the New Zealand median house price was $390,000 - up 7 per cent on the same period last year.
Despite investing tens of millions of dollars in land and buying machinery, Mr Clarkson said the council had "stonewalled" his attempts to build affordable homes in Tauriko. Tauranga would be New Zealand leaders in affordable housing if his deal had been accepted, he said.
"If the council does not file a submission and Tauranga is not added to Schedule 1, it shows the council is not serious about young families and first homebuyers in the area."
Being recognised as Schedule 1 would allow the council to go outside urban limits and "do a lot of things they are currently unable to do" because of regional council limits. It did not mean action had to be taken immediately, but it offered flexibility for future action, Mr Clarkson said.
Councillor Terry Molloy said there were many properties between $200-300,000 available but Mr Clarkson argued these homes would not meet EQ standards and needed upkeep.
Councillor Murray Guy thanked Mr Clarkson for his address and said building costs could add up to "thousands" when you include things such as $6000 for scaffolding, $5000 for double-glaze windows plus insulation costs and other compliance fees. However, he noted the council had backed affordable housing projects, such as The Lakes.
No decision was made on the subject, but Deputy Mayor David Stewart said he understood a submission would have to be filed by Thursday if one was to be lodged.