The first attempt at fast-tracking new housing in Queenstown has gained interim approval.
A housing development next to the Kawarau River, in an area considered to have outstanding natural landscape, has been tentatively approved by commissioners appointed by the Queenstown Lakes District Council.
The decision to back the project, which will result in 134 new townhouses, cannot be appealed to the Environment Court.
It has been made possible by government legislation seeking to increase housing supply in parts of the country with affordability problems.
All developments under the legislation need to be signed off by the Building and Housing Minister.
Queenstown's housing shortage made headlines last year, including when it was revealed one home was being rented by 30 people.
Local ward councillor Cath Gilmore welcomed today's announcement, saying the district would die if it could not accommodate the 700 seasonal workers that flocked there each year.
"We need affordable housing, not just for transient workers but also for our families. We have always lost people who cannot afford to live here because they're working two jobs and not getting enough money."
She was in favour of preserving the region's natural beauty but something needed to be done to address the housing shortage, she said.
"We don't want to end up with swathes of housing all over the basin, that's not the answer either... Then we lose what everyone is coming here to live for.
"Any solution will manage to peeve some people off, and if you peeve all parties off equally then you've probably got as good a balance as you're going to get."
Investor interest 'highly likely'
The Bridesdale Farm subdivision by the Kawarau River will offer three- and four-bedroom townhouses on sections as small as 160 square metres, at about $450,000 each.
Property investor and consultant Olly Newland said the homes were likely to be snapped up by investors looking to rent them out at a tidy profit.
"I think it's highly likely, especially if the loan-to-value ratio lending by the banks is not quite as harsh as it is in Auckland.
"There may well be a queue down there... It's a popular area and it's on a roll."
But he said the development was not without risks.
"Because of the small sites and people sitting cheek by jowl, you may create a slum.
"Especially if there's a lot of tenants going in there - some tenants aren't as good as others... It would be preferable to have much more in the way of homeowners."
Long-term fix needed
Economist Shamubeel Eaqub noted special housing areas were only available for a limited time in Queenstown, and that no more would be considered after March this year.
"What we need is a much more fundamental and long-term fix," he said.
"For that, we need to resolve the issues around planning rules and around the funding for local government - particularly around infrastructure that goes into the development of new houses."
A further three developments are being considered by the council as possible special housing areas, with decisions on these expected in the next two months.