A target of building 900 new houses in Rotorua over the next four years has been described as "ambitious but achievable".
Building and Construction Minister Dr Nick Smith and Rotorua mayor Steve Chadwick signed a Housing Accord yesterday, aimed at boosting Rotorua's housing supply.
It was signed at a 40-lot subdivision site above Lynmore, with council staff and Rotorua MP Todd McClay also attending.
"Rotorua's local economy is doing well and the population is growing at a faster rate than in decades but this is putting pressure on housing prices and availability," Dr Smith said.
In the past four years, the district's population has grown by 5000 to about 73,400 and is now described as a medium growth area with local housing stock under pressure.
The Housing Accord will get the Rotorua Lakes Council and the Government working together to free up more land, grow supply and co-ordinate support for people in housing need.
"We've agreed a target of 900 dwellings and 1050 sections over the next four years, which will average out to 225 dwellings being consented each year," Dr Smith said.
"During the past four years an average of 94 dwellings have been consented each year, so the target is ambitious yet achievable."
Dr Smith commended the council for how easy and quick the negotiation process was.
"We need to maintain this momentum in now identifying Special Housing Areas and complementary initiatives to deliver these 900 homes," he said.
Housing Accords have proved successful in increasing supply in Queenstown, Auckland, Nelson and Tauranga. House building activity has grown by 93 per cent, 78 per cent, 55 per cent and 86 per cent respectively in each of these areas since Housing Accords were entered into.
"This Rotorua Accord has been tailored to reflect the unique housing opportunities for the city and supports the Rotorua Lakes Council's desire to work with iwi to explore options for the development of papakainga housing."
Mr McClay first raised the possibility of an Accord in June. He said the signing of a Housing Accord would see a doubling of the average number of houses being consented in Rotorua.
"We are more than doubling the number of consents and this will result in more houses built more quickly. It will also be a huge boost for our local trades and construction sector."
Ms Chadwick said it would enable the district to address the housing demand.
"We do welcome growth, but it presents a number of challenges putting pressure on roading and other infrastructure, our environment and housing.
"This agreement provides a mechanism to help address those challenges," she said.
"Now it is in place, council will be able to work with landlords and developers to see how we may be able to help them move forward with their building plans."
Steve Lovegrove, Professionals McDowell Real Estate principal, said the timing was perfect.
"There's a demand for new houses in the market place," he said.
"It will roll into more development commercially and in retail."
Mr Lovegrove said the market had stalled and without new housing stock didn't have the capacity to grow.