The Gore District Council has decided to buy a 3.6ha block of land in East Gore at a cost of $360,000, with a view to develop affordable residential sections.
The land fronts on to Wentworth and McDougall Sts and is owned by United States retired dentist and developer Dr Jack Phillips.
Gore District Mayor Tracy Hicks said Dr Phillips had originally planned to develop a subdivision on the site.
The council has an unconditional agreement to buy it for $360,000, well below its rating valuation of $397,000.
Mr Hicks said the council had been aware of the need for affordable residential sections in Gore for some time.
“There were some instances of some people wanting to move to Gore and buy a section to build a new house and they just haven’t been able to find something suitable,”
There were some subdivisions available but they offered larger sections, he said.
Mr Hicks believed families keen to move to the district wanted smaller, affordable sections.
The arrival of the Mataura Valley Milk project had exacerbated the section shortage and was the main catalyst for the council’s move into property development.
“We have been cautiously looking at options for about a couple of years,” Mr Hicks said.
The East Gore block had been considered in 2015 but the timing was not right, he said.
Since then, construction of the Mataura Valley Milk infant milk formula plant had started, bringing with it an influx of people and investment that resulted in a rise in demand for residential rentals and houses to buy.
Mr Hicks said the demand for residential properties would only increase as MVM started looking at hiring staff for the new plant.
He said the subdivision lay to the sun and had beautiful views, easy access to the main road and schools on its doorstep.
He appreciated some people might say the market should be left to provide a solution for the housing shortage. There was also a strong case, though, for the council to show leadership, he said.
“If we don’t have affordable residential sections available for people to buy, we are at risk of them opting to live outside the district.
“In fact, there are indications this is already happening.
“We talk a lot about economic development. However, until now Gore has been the only urban area south of Oamaru without a residential subdivision offering a choice of conventional-sized sections in the mid-market price range.”
Even Balclutha, a town smaller than Gore, had a 66-lot subdivision development being funded by the Clutha District Council, he said.
Gore District Council chief executive Stephen Parry said a subdivision plan and development cost estimates would be presented to councillors in the near future.
It was hoped to start work on developing the land as early as next spring.
“At this stage we are looking at providing about 35 sections of between 700msize,” Mr Parry said.
The land had a gentle topography offering good views, was north-facing and should be relatively easy to provide with infrastructure for wastewater and stormwater, he said.
The council takes possession of the land on Wednesday, April 12.
Council chief financial officer Luke Blackbeard said buying the land would initially be funded from cash reserves but at some point it would be transferred to a loan to be repaid by the sale of sections.