The council and several other parties were making submissions to keep Arrowtown's existing boundary while one Arrowtown resident, Roger Monk, proposed a boundary shift to allow for future development, some of which would be on his neighbouring land.
However, the council's plan change 29 would introduce an urban growth boundary (URB) to manage urban growth in and around Arrowtown.
The plan change objective, as outlined in one of the council's policies, was to "limit the growth of Arrowtown" so "adverse effects of development" outside the settlement and its setting within the landscape was "preserved or enhanced".
Yesterday, lawyer Jayne MacDonald, on behalf of the council, said the URB sought to provide a form sympathetic to the character of Arrowtown's scale, density and layout.
"The council accepts that by not allowing further expansion and restricting supply, there will be a limit on the supply of housing available in Arrowtown," she said.
"However, there is sufficient land available for residential development in the Wakatipu to meet the overflow demand from Arrowtown for at least the next 20 years."
The council did not dispute there could be a shortfall in residentially zoned land by as early as 2016, but "the existence of demand, however, does not automatically oblige the council to provide for it", the council's submission said.
The boundary is defined as the east of Centennial Ave to the north of Jopp St; an established Hawthorne hedge to the west of Centennial Ave; the ridgeline to the rear of Advance Tce and the garden boundaries on McDonnell Rd.
Mr Monk's plan change 39 proposed an alternative boundary, but the council had concerns about its effect on the landscape and the overall effect on the character of Arrowtown.
Council witness and landscape architect Marian Read agreed the topography, the town's entrance and the elevated views of the basin would be affected if the boundary was to move. The Arrowtown Golf course might also be lost.
"The scale of Arrowtown is at stake, with the potential to lose its character, of a cute, quaint township with a deep sense of containment."
Submitters supporting the council were the Arrowtown Village Association and McDonnell Rd residents Dame Elizabeth Hanan, Murray Hanan, David Hanan, Judith Hanan and Jill Rutherford.
The plan change will go before judge John Jackson, of Christchurch, and commissioners Heather McConachy, of Auckland, Ken Fletcher, of Christchurch and John Mills, of Wellington.
