Queenstown's mayor says the government's fast-track process is allowing developers to sidestep years of planning work, leaving councils and communities to pick up the bill.

It comes as Arrowtown residents rally against a proposed housing development they claim could choke roads, harm local tourism and ultimately be a "folly of history".

Ridgeburn Ltd is seeking fast-track consent to build a neighbouring community rivalling the historic township in size - comprising 1210 houses and a commercial precinct between Lake Hayes and the Kawarau River.

A meeting about the proposal organised by the newly formed group Queenstown Smart Growth Initiative (QSGI) drew more than 120 residents to the Arrowtown Rugby Club on Tuesday night.

QSGI spokesperson Hanna Petit said the primary concern was that Queenstown Lakes District Council had already identified well-located, serviced land capable of accommodating growth in its spatial plan - whereas Ridgeburn was about six kilometres beyond the boundary, in a place where traffic congestion was already all too common.

"The issue that we've got with Queenstown is that we live within a basin. So we're restricted in terms of we can't continue to sprawl and we can't build roads to fix the issues that we have with the traffic infrastructure," she said.

"The spatial plan is more than just red tape. It is really a plan that ensures development can happen in the right ways."

The meeting saw frustrations aired not just about Ridgeburn, but also that it was one of 11 major fast-track proposals either flagged or submitted in the district.

Queenstown Lakes District Mayor John Glover said those concerns were valid.

"At a holistic level, it's a bit like conservation. If you work in any conservation field, right plant, right place is absolutely key. And what we're seeing are developments which are not the right plant in the right place - and they're not going to thrive," he said.

"The costs that get imposed downstream, down the road, on the community are quite significant. And we have spent literally millions of dollars of ratepayers money coming up with plans for where growth should happen."

He said conversations with other mayors suggested a rising tide of discontent with the fast-track process - and how it was undermining the careful planning work councils had already undertaken.

"We have a government that's stood on localism and allowing local councils to make decisions. And of course this completely bypasses that," he said.

Ridgeburn Ltd has pitched its project as a way to quell the district's housing shortage, and pledged to rent 135 of the houses below market rate, with a further 45 houses offered to mana whenua or sold "at more affordable price points".

Its substantive application, submitted in March, set out plans to fully fund and build private wastewater and stormwater systems, and establish a community park, sports field and reserve land.

This month fast-track panel convener Jane Borthwick said the project was not ready to be passed to an expert panel for a final decision due to "significant information gaps" identified by local councils.

Ridgeburn Ltd agreed to provide most of the outstanding information, including a more robust transport assessment and an environmental risk assessment, by 10 August.

Petit said she believed Ridgeburn could be a major burden on local roads, ratepayers and the tourism economy.

"The way that fast-track is designed is that it puts the economic benefit at the forefront of the application...unfortunately, you cannot quantify the impact that a development like this would have on our tourism economy," she said.

"We do know that the number one reason people come to Queenstown is because of the scenery and the number one reason that people don't like coming to Queenstown is because of the traffic. And Ridgeburn plays into both of those reasons. And once it's gone, it's gone, there's no coming back."

Resident Mark Cole said he was concerned the developer appeared to be pursuing financial gain at the expense of the existing community.

"We live in the area ... we're the ones that are going to have to live with the outcomes," he said.

"This area ... is a very special area. We've all flown over it as we approach and depart this very special place. This is not the place to be doing this type of development. It's not."

Gibbston resident Ken Mackenzie said he wanted to see the Ridgeburn development rejected before it set a precedent.

He said he was worried it could pave the way for a proposed 900-house development near him, also listed under the fast-track process.

"We've got to start with this one, and hopefully shut this one down, otherwise the Gibbston one will be the next boil on the bum," he said.

Petit said QSGI was set up to make sure the fast-track panel had access to clear, credible evidence so it could understand the true impacts such a large development would have on the region.

In lieu of an opportunity to make public submissions on the application, the group had assembled a team of independent experts to present to the panel and challenge the developers' claims, she said.

"It's not necessarily just the community's view because obviously the community doesn't really have any bearing on the fast-track process. It's more about ensuring that both sides of the coin are presented to the panel," she said.

RNZ has contacted Ridgeburn Ltd for comment.