Napier and Hastings councils are releasing residential land for thousands of sections as house prices jump more than 20 per cent annually, rents climb and motels are used for emergency housing.

Hastings District Council said stormwater issues slowing development at Lyndhurst Rd in Frimley were resolved and it was close to enabling another 270 sections to be developed.

Work on rezoning land off Iona Rd, which could yield about 360 sections, was ongoing.

Hastings Mayor Lawrence Yule, who will resign later in the year because he is standing as National Party candidate for the Tukituki seat in the upcoming general election, said demand was high.


"With seasonal demand and special events even emergency housing has been stressed. For the first time motels used for emergency housing haven't been able to accommodate those people."

He said odour issues from a neighbouring mushroom farm put the council's section-release programme in Arataki Rd, Havelock North off-track.

"We have worked really hard to advance in other areas quickly and some are really starting to come to fruition."

Lyndhurst Rd in Frimley was first off the block with 12 sections, the council having purchased land to enable drainage.

"Some sections have already been released and houses are being constructed," he said.

Subject to Environment Court appeals, Howard St sections in Parkvale were six months from hitting the market.

"We have a developer that wants to put them on the market straight away - it is not a land banking thing."

Today councillors vote on rezoning land off Howard St in Hastings to residential, resulting in about 230 sections.


Councillors also vote on whether to adopt recommendations from the Heretaunga Plains Urban Development Strategy (HPUDS) 2016 review, which identifies land where residential growth would best be placed by councils.

HPUDS has representatives from Hastings District Council, Napier City Council and Hawke's Bay Regional Council.

Its review recommended removing the Arataki Extension from the top tier of the preferred development areas until odour issues from the neighbouring mushroom farm were resolved.

In Napier the HPUDS review identifies areas including Parklands, Park Island, Te Awa, Riverbend Rd, South Pirimai and Mission Estate for growth.

Napier Mayor Bill Dalton said more than 2000 sections were "in the pipeline" over the next 12 to 18 months on private and council-owned developments.

He said market demand was once met through periodically releasing about 15 sections at a time but due to demand the next council release would be 100 sections.

"That takes a while to bring through but we are not dragging the chain at all," he said.

"Some of our land is more difficult to develop so it takes a time."

The HPUDS review says retirement units will represent up to 40 per cent of all new housing yet to be built on the Heretaunga Plains sub-region between now and 2045 with half of those likely to be part of retirement villages.

The increase suggested "a need to reflect on future housing density rules and ways in which greater densities can be achieved without compromising [and ideally enhancing] the urban living environment".

Unless inner city apartments became popular in Hawke's Bay it was likely the "vast majority" of future retirement village development would occur on greenfield land.

It forecasts steady population growth necessitating more than 10,000 additional households needed in the next 30 years, compared with 8014 projected in a 2010 HPUDS report.

In that time people older than 65 will increase 94 per cent, older than 75 years will increase 172 per cent and 90 years 286 per cent. Council district plans needed to incorporate Maori retirement-housing aspirations near marae.

The review projected 4745 dwellings were needed by 2045 with room for 5575 in identified areas for residential growth.