A former Rotorua reserve is to be developed into 10 affordable papakāinga-style rentals after decades sitting vacant and unused.

Tauhara North Kāinga Limited bought the land at 283 Clayton Rd from the Rotorua Lakes Council last month, and held a groundbreaking ceremony two days later.

The council has confirmed it sold the 6422sq m section for $750,000.

The housing project is co-funded by the Ministry of Housing and Urban Development’s affordable housing fund.

Rent for the homes were expected to be less than 80 per cent of the median market rent for the type of home.

Three projects totalling $21.4 million for 64 new houses were green-lit by the fund in the Bay of Plenty.

The other two projects were $6.55m for the Western Bay of Plenty District Council to develop 26 affordable rental homes, while Home in Place NZ Limited received $11.22m to develop 28 homes in Rotorua.

Tauhara North Kāinga Limited was granted $3.58, with the development of the 10 homes in Rotorua approved in September 2023.

A Tauhara North Kāinga Limited spokesman told Local Democracy Reporting 10 three-bedroom, papakāinga style, architecturally designed units were planned for the site.

A groundbreaking ceremony was held on June 8, he said.

Reserve classification revoked decades ago

An agenda for Wednesday’s council Community and District Development Committee meeting noted the sale arose from an expressions-of-interest process to find a developer for the land.

Community and district development group manager Jean-Paul Gaston told Local Democracy Reporting Tauhara North Kāinga Limited’s was the sole response and its submission met the criteria for sale.

The land did not meet the criteria for the council’s Open Space Level of Service Policy so it had been surplus unused land since 1984.

It sold for $750,000 and proceeds would be reinvested into the open spaces and reserves network.

“Rotorua needs housing of all types including affordable rentals,” Gaston said.

“The property was surplus to requirement and its sale provided an opportunity to enable growth in that market.”

Rotorua Lakes Council community and district development group manager Jean-Paul Gaston (right). Photo / Laura Smith.

Information published in an August 2022 council agenda said the council first took control of the land in 1950 to be used as a recreation reserve upon subdivision.

In February 1982, the council resolved to dispose of the reserve as it was surplus to the district’s needs. To enable this, the reserve classification was revoked two years later.

The property was considered of little significance in the overall reserve network in 1982 and was maintained through casual grazing and intermittent attempts at noxious plant control.

It was understood disposal of the land was not progressed due to complaints from neighbouring properties.

In 2022 the council approved staff to start seeking a partner for the development and disposal of the land, and delegated the chief executive – then Geoff Williams – to finalise the sale.

It reported community consultation would have been done in 1984 as part of the revocation process. As the land was freehold and not reserve, there was no further requirement for the council to consult on the land’s disposal.

The agenda noted an application to subdivide the land into five lots was granted in 2020 but council staff recommended they be sold to one developer. Medium-density residential standards were introduced that month.

“In particular it would ensure that the land can be developed comprehensively using best practice urban design principles,” the agenda report said.

“To achieve this outcome, it is recommended that the land is disposed of via an expressions of interest process.”

The tender was awarded to Tauhara North Kāinga Limited in December 2022.