Roger Fewtrell, who sold his business Southern Hospitality last year, said he had already spent $7.6 million on the plan and expected once finished the total cost would be between $36m and $40m.
He had come into “a lot of money” and wanted to repay the city that had always treated him well.
“When I arrived here [from Australia] nearly 50 years ago, I was in bare feet, so to speak.
“The city has been good to me, and there are people out there struggling.”
The Dunedin market had become “almost impossible” for most first-home buyers, he said.
“My first home here cost me about $12,000 about 40 or so years ago. These days, you would struggle to get anything under $600,000.”
He had received consents to turn a section in North East Valley near the Ross Home retirement complex into 19 separate lots, and construction would begin in the next few months.
“I’m trying to keep them affordable. They would be each sold for $100,000 under their market value, so you could say I stand to lose a lot from each of them.
“I’m not doing this for the money. I have plenty.”
The North East Valley development would feature properties ranging from duplexes to four-bedroom homes.
The price range was likely to be between $500,000 and $700,000.
According to QV, the average house price in Dunedin is $627,300.
Ray White Dunedin will be the real estate firm working alongside Mr Fewtrell.
Auctioneer and agent Grant McLean said it was a “unique and exciting proposition”.
Mr Fewtrell was looking forward to things getting under way.
“My purpose is to give first-home buyers a chance. I will be vetting my candidates once the homes are ready.
“I really don’t want a property investor acquiring them for cheap and flicking them on for a profit. So I will be playing God for a little while once I get this done.”
He was keen to have a variety of properties within the sections.
“I want to have buildings of character. I don’t want the sections to turn into a ghetto.”
He had bought land for properties throughout Dunedin city.
He planned to turn a historic former furniture factory in Rattray St into a four-apartment complex.
He was also planning a separate eight-apartment complex close to it.
“I’m working closely with Heritage New Zealand and the city council on that one. We should be ready to file consents in a couple of months.
“I’m wanting to create something that will retain the building’s character. I’ll purchase a lot of antique furniture to go with it.”
He was seeking land for another at least six properties.
All told, he hoped to have 60 affordable homes on the market and if successful this would just be the start.
“I never expected to become a developer. It’s an interesting sort of hobby.
“But I’m excited about this, it is about giving people an opportunity. I’ve got the time; I’m 74 and sort of retired.”
Mr Fewtrell co-founded Southern Hospitality in 1989 and the supplier to the hospitality and food service industry grew to have 12 showrooms nationwide.
It was bought by Australian firm Reward Supply Co last year.