A shortage of land supply in Tauranga will eventually drive house prices up following the Government's decision to ditch a policy which fast-tracked new development, industry experts say.

And a local social agency representative says it will be the city's homeless who will pay the price.

The Government has said the Housing Accords and Special Housing Areas Act introduced to address housing supply and affordability will expire as scheduled in September.


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It meant two Special Housing Areas (SHAs) that would have seen 500 homes built in Pāpāmoa have been canned.

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When asked exactly where those SHAs were, the council said that information was "commercially sensitive" and were not able to reveal the exact location or name the developers.

Instead, a council spokeswoman said in a statement to the Bay of Plenty Times that developers were investigating a range of section sizes and housing typologies.

"The fact that SHAs can't be progressed any more doesn't mean houses will never get built there – they could potentially proceed at a later date either through a City Plan change process or a resource consent," the spokeswoman said.

"They, however, would not be built in the timeframes which an SHA would have enabled."

Housing and Urban Development Minister Phil Twyford said the Government was not extending the former Government's legislation because "the costs outweigh the benefits".

"While it increased housing supply in some cases, it hasn't made housing more affordable," he said.

Twyford said a proposed Housing and Urban Development Authority will be established in 2020 and will have greater power than SHAs to fast-track urban development projects and have the ability to acquire land.

Freeing up land for housing is the responsibility of the council, Twyford said.

"Tauranga City Council has more than six weeks to lodge its applications for its proposed SHAs in Pāpāmoa and Tauranga," he said. "It was always intended as an interim measure."

General manager of Tremains Bay of Plenty and Waikato, Anton Jones, was surprised at the decision.

"There seems to be a shortage of future land supply and it is a concern from everyone's perspective."

Jones said supply and demand for homes would increase as more people moved to the area. "That, theoretically, is going to increase house prices."

Tommy Wilson, of Greerton-based Te Tuinga Whānau Support Services Trust, said losing SHAs was not good news for the city's homeless or social agencies working to get people off the streets.

"They [the homeless] are going to pay the price," he said. "We have four mothers with three children each with nowhere to go and winter is knocking on our door."

Wilson wanted to see a partnership between the city council, local developers and Māori trusts to put up land to be developed for affordable housing. "Let's just be practical," he said.

Western Bay of Plenty Mayor Garry Webber, who is on the SmartGrowth leadership group, was disappointed SHAs had been repealed.

"It worked very well for us in Ōmōkoroa," he said. "But it just means councils have to be more vigilant in setting structure plans."

Dwayne Roper, director of Tauranga-based Zariba Holdings which is developing the Terrace Views SHA in Pāpāmoa, said the legislation helped to speed up the building process.

"It [SHAs] always had a term on it but they could have renewed it. By not renewing it, it is just going to slow things up even more."

Roper said it meant developers would now have to use the original Resource Management Act process, which could take anywhere between six months to five years.

"It is pulling out something that was actually working," he said. "It is going to continue to drive [house] prices up."

Bluehaven chief executive Nathan York said the SHAs had helped to create and develop further residential supply.

"The repercussions of removing the SHA will see significant pressure placed on the city's already tight supply of land and it will become too difficult without them," he said.

"The expiration of the SHA won't affect the land Bluehaven currently has under development. But it has the potential to affect new land in the future."