In the council's Thursday meeting, the central city residential development contributions rebate scheme, which has benefited developers millions of dollars since its inception in 2014, was extended.
A development contribution is a charge on new developments that place additional demand on the city council's infrastructure. Revenue from development contributions is used by the city council to repay debt funding which is used to provide growth infrastructure.
However, since 2014 the city council has rebated residential developments within the four avenues of development contributions in a bid to encourage growth in the city centre.
A total of $13.5 million has been rebated to developers since the policy's inception, contributing to 1175 new units being built in the central city.
The scheme will now continue beyond the start of next month and until a total of $20 million is rebated, unless the council decides to bring it to an end before that.
A new covenant has also been applied to the scheme which would require developers receiving the rebate to prohibit the owner of the property from using it for forms of short term accommodation, such as Airbnb.
A similar policy aimed at a commercial development in the central city was not extended and is due to expire at the end of this month
Keep Our Assets Canterbury has previously labelled the residential scheme as "socialism for the rich."
City councillor Jake McLellan told Star News on Wednesday he was probably going to vote against the policy, and he did alongside councillors Sara Templeton, Yani Johanson, Melanie Coker, Jimmy Chen, Pauline Cotter and Andrew Turner.
McLellan said: "This smacks of corporate welfare at a time when we as a council are looking to tighten our belt."
Johanson questioned whether the city council could afford it under the current Covid-19 climate which has resulted in the council suffering a $99 million shortfall.
The rebate is debt-funded and comes at a cost of about $756,900 a year to the council and has a 0.15 percent impact on rates.
"Subsidising million-dollar apartments should not be seen as a priority for us as a city," he said.
However, Mayor Lianne Dalziel thought the intentions behind the policy were "fantastic" and were all about instilling momentum within the development of the central city.
City councillor Phil Mauger said: "A lot of people have invested a lot of money in their shops and pubs and we owe it to them, we said we would get 20,000 people in there [the central city] and if this helps get a few more then the better off we will be."
The city council is currently aiming to increase the residential population of the central city from 6000 to 20,000 people by 2028 as part of what it is calling Project 8011.
City councillor Catherine Chu told councillors if they did not want more investment and more affordable housing within the central city, they should vote against the scheme.
However, Deputy Mayor and chairman of the city council's finance and performance committee Andrew Turner questioned this.
"Two arguments in favour of this seems to be that it increases affordability [of houses in the central city], there certainly has been a link made there in a number of debate items this afternoon, I have not seen any proof whatsoever of this and it would be difficult to prove this," he said.
"The second claim which that this incentivises development, there have been a number of media articles that have claimed a number of developments have been developed because of this incentive, we do not know that, they may have been built anyway."
Williams Corporation managing director Matthew Horncastle, whose company has benefited $2.9 million from the policy, helping build 255 units within the heart of the city, rejected claims of the policy being "corporate welfare" and "socialism for the rich."
"You either want to build the city or you don't. One thing you have to do in achieving that is that you have to make it attractive for developers and reducing as many costs as possible will assist in that heavily," he said.
