As part of an agreement between Shotover Country developers Ladies Mile Partnership and the trust, they would be given the option of 26 free units, or a greater number of lots or land at a reduced price.
They would be able to purchase additional lots in the proposed $300 million, 750 house development off State Highway 6 near Lake Hayes Estate, at full market value.
Trust chairman David Cole said its preferred option would be to acquire a larger tract of land to allow for more affordable houses, creating a neighbourhood of mixed tenures.
He quoted Statistics New Zealand's projections for Queenstown's population, excluding Hawea and Wanaka, which predicted a population increase of about 10,000 over the next 15 years.
"So if that translates to an additional 4000 homes, where are they going to come from? " Mr Cole asked.
"The trust is keen to make sure the community has some solid long-term planning locked away because, if we don't, the consequences will be scrabbling in a decade from now trying to deliver affordable housing by trying to deliver ghettos and small clusters of affordable housing, which will be identifiable for what they are."
He said Queenstown had the chance of building some "strong, socially adhesive communities" that were affordable and had the right mix of households to provide long-term lifestyles of the residents well in advance of future housing need.
Shotover Country lawyer Warwick Goldsmith said the agreement would be signed by the end of the week, subject to a number of minor changes.
Other parties who gave evidence at day two of the hearing yesterday included Grant and Sharyn Stalker, partners in the Ladies Mile Partnership, and the pair behind the Shotover Country concept.
It was the first time they had had the opportunity to speak to Queenstown Lakes District Council commissioners at a hearing, and Mr Stalker said he believed the "Kiwi dream" of affordable home ownership in the Wakatipu was still possible.
Consulting Engineer David Hamilton said the proposed site was not affected by Queenstown's 1999 flood and, similarly, would not be at risk from one-in-100-year flooding events.
Some minor flooding might be experienced at the lower end of the site if river sediment continued to build up.
He said this would be addressed as part of the joint Otago Regional Council-QLDC flood strategy, under which more than a million tonnes of river gravel would be removed.
Shotover Country proposed using this to raise the ground level of flood-susceptible areas.
Mr Hamilton said even if rubble from landslides in the Upper Kawarau River resulted in "ponding" up Lake Wakatipu and the Shotover River, it was unlikely the site would flood, and in the remote chance it did, there would be adequate time for local government to respond with mitigation measures.
The hearing continues today and Friday.
