Newly released documents have revealed detailed reasons why Housing Minister Megan Woods declined the Ngongotahā Special Housing Area application last week.
Her letter to the Rotorua Lakes Council and a briefing Ministry of Housing and Urban Development staff were provided to the Rotorua Daily Post under the Official Information Act.
The minister said despite the potential benefits of the 80 affordable houses proposed, the application "highlighted several issues".
She said an engineering firm's independent review found the site was "reasonably complex" because of its proximity to Waitetī Stream, and its potential to increase flood hazard to downstream properties.
"Any flood mitigation would, therefore, need very careful consideration."
Landowner and developer Martin Schilt. Photo / File
Woods concluded the development at 31 Ngongotaha Rd was "best progressed through a plan change under the Resource Management Act 1991, where the views of potentially affected parties can be more thoroughly tested".
Her briefing from ministry staff recommended she decline the application.
They said the proposal was consistent with the Rotorua Spatial Plan, which "estimates a need for around 17,000 dwellings in the next 30 years to respond to population growth".
The briefing said the water supply and wastewater infrastructure at the site could cater for the proposal without any upgrades but stormwater was "a significant issue".
"Following the storm event on April 2018, the Ministry of Business, Innovation, and Employment requested additional analysis of flood risks of the proposed site. The Council has undertaken high-level assessment of the site that suggests that the proposed housing area is outside the 100-year floodplain and therefore should be able to be developed for residential housing.
"This is a preliminary assessment. The Council has advised that should the SHA be approved, further detailed work would be undertaken".
The Bay of Plenty Regional Council said the district council was "reasonably accurate in this assessment but cites caution on certain assumptions".
The ministry's recommendation also said the housing area would "exacerbate congestion through the Ngongotahā township and the roundabout at the intersection of State Highways 36 and 5".
Housing Minister Megan Woods (left) with Prime Minister Jacinda Ardern. Photo / File
However, it said local schools could accommodate growth from the housing area.
The ministry wrote that "feedback from community consultation almost unanimously rejected the area proposal, with main opposition being a perceived inappropriate council decision-making process and the proposed use of unsuitable land."
However, site landowner and developer Martin Schilt told the Rotorua Daily Post last week "10ha of the land was above the 100-year-flood level, plus half a metre, plus [allowing for] 200 years of global warming ... Plus you have to build your house so much higher off the ground too."
He said 80,000 cubic metres of earth could be moved at the site, so "the land level would basically be the same as the houses opposite and those houses will never flood."
'This bureaucratic misalignment is suffocating us'
Steve Chadwick told the Rotorua Daily Post on Friday she had talked to the minister "and she is very aware we are not happy with the advice".
"We have Government departments seemingly working at odds with one another. We are having discussions regarding that. Ultimately, we all want the same outcome and council can't solve this alone."
Rotorua mayor Steve Chadwick and Rotorua Lakes Council chief executive Geoff Williams. Photo / File
She said the council would continue to work with the minister, Government officials and agencies to increase housing supply in Rotorua.
"Right now we have about 2700 people in our community registered as not having a home and what we are currently doing collectively isn't producing the homes our community desperately needs so we need a better collective response. This bureaucratic misalignment is suffocating us."
The Prime Minister's take
When Prime Minister Jacinda Ardern was in Rotorua on Thursday, the Rotorua Daily Post asked if she stood by Woods' decision.
She said, "that's an issue that Minister Woods has already spoken to, so I'll leave it at that".
Prime Minister Jacinda Ardern in Rotorua. Photo / File
However, she added that Rotorua had "not been spared" from the housing crisis.
In response to Rotorua mayor Steve Chadwick's comments that "all of us [councillors] should feel outraged" by the decision, Ardern said, "of course there is strength of feeling around the country around us dealing more broadly with the housing crisis".
"We are, as I say, addressing [this] with public housing, transitional housing, Housing First, increasing state-house builds ... We have a number of areas where we are working really hard".
She said Special Housing Areas were not the only tool available to the Government.
When asked if she felt homelessness was a threat to tourism in cities such as Rotorua, the Prime Minister said: "I think there's a job for us to play alongside Rotorua in addressing that issue."
She said programmes such as Housing First would help address the problem "if people are in indeed feeling like its having a knock-on effect for international guests".
Pōwhiri for opening of Housing First in Rotorua. Photo / File
At the time of Minister Woods' decision last week, Rotorua MP Todd McClay said he was "surprised and deeply disappointed" by it.
Rotorua-based New Zealand First deputy leader Fletcher Tabuteau said it was a missed opportunity.
"On the face of it, this looks like a poor decision ... This must have been a difficult decision for the ministry."
