The Anzac Court subdivision was left partly underwater during July’s flooding, despite being granted consent in 2008, when the possibility of flooding was discussed.
One of the men who developed the subdivision says the land need not have flooded, if a culvert under a nearby state highway had been performing properly.
Fred Doherty, of Outram, said there had been rain events in the past during which drainage at the site had performed well.
He said rusting metal at the entrance to the culvert had caused the problems.
The metal was evident when the Otago Daily Times visited the site. NZTA coastal Otago maintenance contract manager Nic Rodger said a team had visited the site last week.
"Once their investigation is complete, we will report back to the ODT, interested parties and the Otago Regional Council."
Mr Doherty said he and fellow developer Niven Hyslop had owned the residential-zoned land from the early 2000s until they developed the subdivision.
While Mr Hyslop owned a section there, the pair now had no other financial interest in it.
Mr Doherty said water usually ran off a hill behind the land, then along a small creek to the west of the subdivision.
During the consent process, he was required to provide a hydrology report, and upgrade four culverts, three of which were on a neighbour’s land, "which we did to the letter of the law".
When the flood happened, the drainage "performed worse than it has ever performed".
"We’ve had some large rain events, and we know how things perform.
"This time, the water backed up to such a level it came back up the road."
Once the flood receded, it "looked obvious to us" a culvert where the stream ran under the nearby SH87, not one of the four upgraded, had been blocked.
The water was at least a metre higher on the upstream side than the downstream side.
"Obviously, that culvert was acting as a dam that has just backed the water up."
Mr Doherty said one affected homeowner was a week away from shifting into his house when it was flooded.
