Development plans for land in Grenada Village. The area overlooking State Highway 1 was included in the Lincolnshire-Woodridge Special Housing Area in November 2014.

Residents of a northern Wellington suburb are "appalled" by plans to build 150 homes in the area, saying affordable housing could ruin the character of the suburb.

In a community newsletter, the Grenada Village Residents' Association said the planned development would lead to an "extraordinarily large concentration of budget housing" that would be "unacceptably out of character with Grenada Village".

"Not only will all our property valuations be affected by this, but the long-term effects of such an extensive clustering of cheap housing could be disastrous for obvious reasons," the association said.

LUCY SWINNEN/FAIRFAX NZ The area between Aruba Gr, Grenada Dr and State Highway 1 could have almost 150 houses added if a resource consent submitted by developer Hunters Hill is approved.

Residents have not been consulted on the development, which was submitted to Wellington City Council under the Special Housing Areas Act, designed to fast-track new and affordable housing in the city.

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Wellington City Council has consistently fallen short of its goal to build 7000 houses in five years as part of the Wellington Housing Accord, signed by the council and the Government in 2014.

LUCY SWINNEN/FAIRFAX NZ The view from of 11 Grenada Drive from Aruba Grove.

The accord allows the council to create "special housing areas" with fast-tracked consenting conditions, no public notification and limited appeal rights.

Guy Callender, director of developer Hunters Hill, said there was "nothing here out of the ordinary", and the company was under no obligation to consult with the community.

More than half of the 147 proposed homes would fall between $450,000 and $550,000, and would fill demand for affordable housing in the city, he said.

LUCY SWINNEN/FAIRFAX NZ The corner of Aruba Grove and Grenada Drive.

He rejected as "utter nonsense" the notion the development would change the character of the suburb, or that it was isolated from services.

"It is getting more and more difficult for young people to get into homes," he said.

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A resource consent application was lodged with the council to build a mix of housing on the land between Aruba Gr, Grenada Dr and State Highway 1 on August 22.

The application has not yet been approved by council, which is seeking more information from the developer.

Economist Shamubeel Eaqub​ said there was a valid argument in protecting the design character of a neighbourhood, and there needed to be enough amenities, such as public transport and schools, to support growth. That was the job of public planning authorities.

However, rejecting budget housing suggested the residents did not want certain types of people in their neighbourhood, or were afraid of change, he said.

"Opposition, by and large, tends to come from older, whiter, richer suburbs ... we saw it in Auckland, the opposition came from Herne Bay ...

"There's not the same kind of opposition from poorer neighbourhoods."

While the housing market was described in November as cooling around most parts of the country, Wellington prices continued to soar at a faster rate than Auckland's. House values jumped by 21.1 per cent in a year, taking the average to $558,886.

Deputy mayor and housing portfolio leader Paul Eagle said Hunters Hill got "a big tick for building more affordable housing", but there needed to be "more conversations with neighbours".

He said the current housing accord, which allowed almost 150 houses to be added to a suburb without any consultation or notification with the community, was unfair.

"The problem with the current process is the communities don't get a say."

Problems with Special Housing Areas would be discussed at the first meeting of the Mayor's Housing Taskforce on Thursday.

- An earlier version of this article included comments attributed to Grenada Village Residents Association chairman Bruce Patterson, that the development was "socially unacceptable" and that he was "appalled" at the concept. These were made in the context of his concerns around the proposed density of housing and livability issues for the new residents, and not out of a fear of change or wanting to exclude certain types of people. The error is regretted.