A resource consent has been granted by the Dunedin City Council for the development in Brighton.
Residents of the coastal settlement near Dunedin who the Otago Daily Times approached for comment were content with the results of a hearing.
The applicant, GK Accommodation Ltd, had proposed 46 units be allowed, but a series of changes was made to the proposal before the land-use consent decision was issued.
Concerns had been expressed about how well the development in Brighton Rd might gel with the community.
They were largely allayed through the hearings process.
Council planner Jane O’Dea had recommended consent be declined and, though she welcomed changes to what was envisaged, she remained concerned about the quality of communal outdoor space.
The resource consent is to lapse after 12 years.
Immediate neighbour of the former caravan park Simon Laing said he was pleasantly surprised by the decision, including conditions of consent.
The Brighton community had done its best to ensure the landowner created "the happiest place we can for the residents", he said.
His partner Anne-Claire Mauger said community consultation had been solid.
"The conditions seem now good for new residents to live in the camp, and to ensure positive interactions with our community," she said.
"I hope they will have a nice time in Brighton, and that communication will keep flowing from both ends."
Another submitter to the hearing, Elizabeth Cotton, said she was grateful for the reduction in unit numbers and she was satisfied with the overall decision.
It remains possible it will be appealed in the Environment Court.
Hearings committee chairwoman Christine Garey said the panel was encouraged by the applicant’s willingness to listen to submitters’ concerns and make changes.
"We recognise this represents an unusual form of residential development for Dunedin, but also how important it is to provide temporary accommodation for the large number of workers coming to our city to help build the new Dunedin Hospital," Cr Garey said.
"Ultimately, the project represents a good reuse of the site and a great outcome for everyone involved."
