Tauranga City Mayor Stuart Crosby has fired a warning shot at the National-led Government in an attempt to tweak Tauranga's affordable housing dilemma.

At a select committee of the Government's Housing Accords and Special Housing Areas Bill in Auckland yesterday, Stuart says Tauranga City Council are in support of state intervention to build affordable housing, but says increasing land supply alone is not the solution.

Speaking on behalf of council and SmartGrowth - a collaboration with the Bay of Plenty Regional Council – Stuart says the Government's current plan has the potential to create slums by bypassing the quality protections in the Resource Management Act and council plans.

The current bill looks to enhance housing affordability by increasing available land and housing supply in regions or districts suffering affordability issues.

'My general view with the greatest respect to the people who wrote this bill is that they don't understand the consequences of this bill.

'One of the key ones is the need that there is a direction connection between land supply and affordable housing. There is a connection but it's not as strong as this bill is proposing.”

In Tauranga and Western Bay of Plenty there are 15,000 lots of land potentially zoned as residential housing, which remain untouched due to reasonably high land costs.

Tauranga is a high priority after ranking third behind Auckland and Christchurch as the most unaffordable city for housing with an average asking price of $415,000 in 2012.

Auckland is the least affordable market with a median multiple of 6.7 – which measures the ratio of house prices to annual household income. Auckland was closely followed by Christchurch with 6.6, and Tauranga-Western Bay of Plenty 5.9, while Wellington (5.4) and Dunedin (5.1) also rate as severely unaffordable.

Affordability is measured through the median house price, currently at $380,000, with Tauranga sitting nearly six times above the median wage and three times above the unaffordability mark.

Council is not opposed to the bill in total, but is concerned about around certain details of the bill including a 'fatal” yet technical flaw where council lose the ability to retrieve development contributions on the housing developments.

Stuart could not give an exact figure but suggests this could be in the 'tens of millions” depending on the development scheme.

'If we cannot retrieve development contributions then the ratepayers will have to pay more,” says Stuart.

'Affordable housing is a key issue especially in Tauranga. At the end of the day my parting shot was the market is the market whether it is commercial or residential market. It ebbs and flows with the economy.

'If the Government of the day are serious about affordable housing the only way it can be addressed is by intervention both by delivering houses and financing houses.”

Labour's housing spokesperson Phil Twyford agrees with Stuart saying freeing up more land will not deliver more affordable homes.

'Housing in Tauranga-Western Bay of Plenty is the third most expensive metropolitan centre after Auckland and Christchurch, and that's not due to a lack of available land.”

Phil says under the National-led Government there is no obligation for developers to build affordable homes.

'In its rush to be seen to be doing something, the Government is forcing an Auckland-centric model on areas where it doesn't fit. The Government's focus on cutting through planning regulations and increasing land supply as if that is a panacea is a half-baked response to the problem.”