A Tasman district couple are "devastated" after learning their bid to build affordable housing on their land has been denied.

Jason and Ange Mudgway, who live in Hope, south of Nelson, had planned to build up to 47 homes on their rural property under the Special Housing Areas Act.

Introduced by the National Government in 2013, the temporary law aimed to streamline new developments by lessening consent times with accords between local councils and central government.

In March, the Labour Government said the legislation would not be extended beyond its September 16 expiration date, and that no new special housing areas (SHAs) would be established after the deadline.

The Mudgways application is ahead of the September 16 deadline. However, in a letter to Tasman District Council mayor Richard Kempthorne, new Housing Minister Megan Woods explained that a backlog of applications meant the Mudgways' wouldn't be considered.

While the project sounded like a "promising opportunity," and would provide affordable housing, the ministry needed to follow a "fair process", Woods said.

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