A proposal to sell 10 Rotorua reserve sites is one step closer to public consultation after it cleared another hurdle in a split council vote.

On Thursday, the Rotorua Lakes Council Strategy, Policy and Finance committee meeting agreed to recommend to the council to put the proposal out for public consultation, in an eight-part motion.

Councillor Raj Kumar and Te Tatau o Te Arawa representative Potaua Biasiny-Tule voted against all parts, while councillors Tania Tapsell and Sandra Kai Fong voted for all motions except one, which referred to in-principle support of direct sale of six sites to Kāinga Ora.

The move to put the proposal out for public consultation will need to be approved by the council to begin.

The proposal would dispose of the parcels of land as reserves, enabling the council to sell them to Kāinga Ora, community housing providers and private developers.

It proposes that funds from the sale of the land would be reinvested into the community's reserve network.

In the meeting, council district development senior strategy advisor Stephanie Kelly told elected members the council had identified 10 reserves that had no clear purpose or function, were in a poor location, were large and costly to maintain and or had safety issues.

An example of one, she said, was the High St Reserve, with no street frontage and which had issues with 'unsavoury behaviour” such as drug use.

Kelly said the preferred method of disposal was via a local bill as opposed to via the Reserves Act, as disposal via the Reserves Act was 'lengthy” - likely more than two years.

She said the reinvestment of funds from sale into the reserve network would allow the council to acquire or improve other reserves, reduce maintenance costs and address the district's housing shortage.

Kelly said the proposal had a possible yield of about 120 homes.

Council district development deputy chief executive Jean-Paul Gaston said none of the 10 reserve sites were gifted reserves.

Kāinga Ora's development could be public homes or affordable – Kiwibuild – homes, he said.

Kāinga Ora would offer the council a 'fair market price” for the sites but would not compete with the market.

His presentation stated if Kāinga Ora was not able to buy the land it would impact the expansion of public housing in Rotorua and an end to emergency housing in motels.

He said 'everyone” wanted 'Fenton St and the emergency housing issues addressed”.

'Without public homes to go to, we're at a risk of this being extended.”

He said the local bill would not give the council 'carte blanche on any other reserves”.

Gaston said there were 'multiple points” - through consultation, consenting, Kāinga Ora and the local bill process, for community concerns to be raised.

Councillor Raj Kumar asked if the council should have consulted before doing the work the council had done to date on the proposal.

'I would actually like to move a motion to kill this bill.”

Meeting chairwoman councillor Merepeka Raukawa-Tait said the proposal was about trying to enable housing and consulting with the community on the proposal.

Gaston said it was not 'a done deal” or 'predetermined” and it seemed 'a bit ridiculous that we would go to that point and create that anxiety if we … had not completed a level of due diligence.”

Rotorua Lakes Community Board chairman Phill Thomass expressed some concern about another local bill – following the controversial Rotorua Māori wards bill, which the council paused last month – as the council had 'sort of lost control of the message” on the last one.

Te Tatau o Te Arawa representative Potaua Biasiny-Tule asked where kids would play if the Turner Dr Reserve was converted to housing. Gaston said only part of the reserve would be sold and money from the sale would be reinvested into reserves.

Biasiny-Tule said, in his opinion: 'That's my problem, if you underspend over 10, 20 years, of course it's run down so you can flick it off.”

Councillor Tania Tapsell said the proposal had caused the community 'pain and uncertainty”.

She expressed concern a local bill handed over power to central government on the decision. Gaston said control was 'very clearly” specified by what the council sought in its bill.

Councillor Sandra Kai Fong asked if Kāinga Ora could provide clarity on the kind of houses to be built, or it would be 'a bit of a lottery” for the residents on the back of the reserves 'whether they get social houses, or Kiwibuild houses”.

Chief executive Geoff Williams said it would be difficult for Kāinga Ora to provide clarity until it was confirmed the sites were available for purchase.

Kai Fong said the council needed to make sure it was not 'simply distributing the social housing problems around Rotorua, rather than diluting them”.

Rotorua mayor Steve Chadwick said the proposal was 'fair” and 'reasonable”.

The next council meeting is scheduled for May 26.

-Local Democracy Reporting is Public Interest Journalism funded through NZ On Air