National had failed to make necessary investments in housing, infrastructure, and public services needed to cope with the rapid growth, he said.
Labour would introduce "moderate, sensible reforms" to reduce the pressure on cities while ensuring the country still got the skilled workers it needed.
That included an immigration restriction on overseas students "rorting" the visa scheme.
Labour would stop issuing student visas for courses below a bachelor degree not independently assessed by the Tertiary Education Commission and NZQA to be of high quality, he said.
Tauranga Chamber of Commerce chief executive Stan Gregec said the chamber believed a one-size-fits-all national policy would not address regional demands for skilled labour.
"We have no specific view on the Labour Party proposal, other than it appears to be another attempt at a one-size-fits-all solution which doesn't pay a lot of regard to specific local and regional needs," he said.
"We believe it is critical for local business and industry to have access to the skills and labour it needs, which means immigration will always be an important avenue for us."
Mr Gregec said a better regional focus for immigration was needed in consultation with business and local training institutes.
Priority One chief operating officer Greg Simmonds said such a drastic slash in immigration numbers would have a negative impact on local businesses, which often relied on skilled migrants to fill job vacancies.
Mr Simmonds said it was not helpful to target offshore students as the vast majority of those who arrived to study returned to their home lands and had no plans to apply for long-term NZ residency.
Education Tauranga spokeswoman Anne Young agreed.
"I think Labour's immigration policy will make it very difficult for some employers who need to fill vacancies, especially those in the hospitality and aged-care sectors."
Tauranga MP Simon Bridges said Labour's policy would stop thousands of skilled people migrating to New Zealand and contributing to the economy.
"By comparison, the Government has made some adjustments to our immigration policy which we think strikes the right balance between managing migration flow and maintaining sustained growth.
"We're an open, confident growing economy with a high employment rate, and skilled migrants play a key role in thriving sectors like tourism, hospitality and construction."
