Developers were heavily represented among the 180 people who submitted against a tweak to the district plan ahead of a hearing which starts on Tuesday.
The policy would force developers to contribute 5% of the estimated sales value — either through land or a monetary payment — of new subdivisions to fund construction of affordable housing through the Queenstown Lakes Community Housing Trust (QLCHT).
A consultant planner for the council had recommended the plan variation, known as inclusionary housing, be adopted with minor changes.
While 158 submissions were against the plan, a small minority were in favour and the trust said it was needed to help solve the $1 billion housing affordability problem in the Queenstown Lakes District.
Trust chief executive Julie Scott argued increasing supply would not address the housing affordability issues alone and tools like an inclusionary housing variation were needed.
"Without inclusionary housing becoming a mandatory requirement in the [district], we simply won’t have the resources to house the 800 households on our waiting list."
Dozens of developers had stepped up to oppose the change and labelled it a "tax" that would make them less likely to build in Queenstown and make housing more expensive for most people.
They also argued the costs of affordable housing should be spread across all ratepayers.
In a statement on behalf of 10 developers, including Milbrook Country Club and Willowridge Developments Ltd, economics consultant Fraser Colegrave described the proposal as a "blunt, ineffective and inefficient tool".
Mr Colegrave said the policy wrongly placed the blame for the district’s housing affordability woes on developers.
The root causes of the problem were the district’s extremely high land prices and elevated construction costs, which the policy did not address, he said.
Housing prices were exacerbated by the impacts of short-term rental platforms like Airbnb that reduced the pool of homes available for long term rental.
Willowridge Developments Ltd director Allan Dippie said the extra "tax" would mean some housing projects would no longer be viable for developers.
He said Willowridge and other developers would prioritise projects in other regions.
"The very notification of the variation has further reduced our appetite to plan for future residential projects."
Former mayor Jim Boult said in a late submission the change was needed for Queenstown to be a community where a mix of residents from all socio-economic backgrounds could co-exist.
"This is a chance to make a real difference to the ability of essential young families to exist here and be the important part of our community that they need to be."
