Waimate is looking at expanding to cope with future demand for residential sections.
Its district council is considering making changes to its district plan to ensure managed growth of residential areas adjoining the town.
However, before it gets to that stage, it plans to consult the public.
On Tuesday, the council will consider a report from consultant planner Davie Lovell-Smith on where new areas should be zoned for future houses.
"One of the stumbling blocks in determining appropriate areas and boundaries for growth has been how these areas will be serviced economically and efficiently," the report said.
Research undertaken in 2006 included surveying land owners on the boundary of Waimate, along with real estate agents and other professionals, about the potential for growth.
At that time the results showed a huge potential for subdivision.
Since then, demand for sections had grown then declined slightly with the economic recession.
The report recommends providing a variety of residential development to meet a wide-ranging demand.
It identifies areas for residential development, but also recommends changes to prohibit spreading of houses.
The report also identifies the need for two types of rural-residential zones on the periphery of the town, and more protection for land outside that.
