The Nelson City Council has shown initial interest in supporting co-housing developments in the city.
The idea for a cluster of self-contained, private homes with some common facilities and shared neighbourhood life was presented to councillors recently.
A member of the leadership team driving the project, Jace Hobbs, said they had been working on it for about 18 months.
It would be a pocket neighbourhood modelled on Auckland's Earthsong model and Peterborough Housing Cooperative in Christchurch, and could be anything from 12 to 25 houses.
Mr Hobbs said it was aimed at families to retirees, plus today's young adults, many of whom did not believe they would ever own their own home.
"Post-university students have suggested to me that they never expect to own their own home, and I want to change that.
"I think it's very possible we're going to have a new paradigm in New Zealand that will allow us to access housing, and bring our young people along into a secure situation. That would alleviate so many other social issues as well, if they have an expectation of long-term housing, and the potential for it," Mr Hobbs said.
The latest figures from realestate.co.nz show the average asking price for the Nelson and Bays region is now $614,027 which is 16 percent higher than the same time last year.
The average value of a residential property in Nelson City is $562,832 and marginally higher in Tasman District, according to Quotable Value.
The average national house value was $678,856, an annual increase of 6.4 percent when adjusted for inflation.
Mr Hobbs said today's young generation would also struggle to develop their own communities, through the lack of affordable housing options.
He told the council in the public forum of a recent council meeting that the concept was popular in the US and in Europe, where the home is owned and can be sold by an individual or family, but the land beneath the development is not individually owned.
"It's nothing to do with a counter-culture or it's nothing exclusionary - for some the biggest drawcard is the option of childcare on site," Mr Hobbs said.
He said they were now on the search for available land, and had enough core investors to buy it, but it was proving difficult competing against organisations with more resources in a highly competitive market.
In answer to a question from councillor Matt Lawrey about lending rules for co-housing, Mr Hobbs said Kiwibank had indicated it would support the concept.
"We would like it to be accessible to walking and cycling and we know there are different models for this, both rural and urban, and we're open to those things.
"We have a bit of a vision that this can be replicated, once we have a successful first start, then we can reach out and create another situation based on that success."
Mr Hobbs said ideally that would bring young families, and older folks together to create an inter-generational synergy.
"It would provide the kind of emotional and social contact we've always wanted but some how got separated from."
Nelson Mayor Rachel Reese said it was clear that current rules aimed at making housing an option for all were not working.
The city council was planning a review of its regional plan that would provide a lot more choices for comprehensive housing, she said.