At its meeting yesterday the council recommended the 400-lot development go to the Government for final approval.
The meeting was attended by more than 40 members of the Lake Hawea community, some holding placards such as "Hawea Voices Matter" and "Democracy before SHA".
The SHA is proposed by Universal Developments Hawea Ltd, owned by Lane Hocking.
Mr Hocking said 10 housing companies he was working with would be offering house and land packages priced between $464,000 and $550,000.
"Currently there are zero houses in this district listed at this price."
Lake Hawea resident John Langley said the town did not have a "so-called housing crisis" and based on Statistics New Zealand figures, "we would expect only 17 eligible households want to buy in Lake Hawea".
Queenstown Lakes Mayor Jim Boult asked the council officers presenting the council's report if the project's opponents were correct to claim there was insufficient demand for the development.
Consultant planner Blair Devlin responded by saying the median sale price for houses in the township had nearly doubled between 2013 and 2017, from $381,000 to $625,000.
Hawea resident Jason Kelly supported the SHA, saying it was the only development in the area offering "affordable housing of a high standard on a good-size section and a good-size house".
"Many of our friends have signed up, and nothing else has come on stream that offers us a real alternative."
Objectors had "offered no solution for us and the 300 other people who have registered their interest in the SHA".
"It's always easy to object and be selfish in the protection of what you have."
Opponent Don Robertson said the proposal was "half-baked", and residents did not like being "muzzled bystanders" to a decision that would massively change the township.
In September, at the suggestion of Cr Scott Stevens, the council delayed making the decision while more negotiations were conducted.
Cr Stevens said despite the proposal being called "half-baked", he was confident the changes made would "better integrate the development with the town".
"I think it's a very good proposal that just happens to be an SHA."
"You can be sure the burden of the proposal will not fall on you," he told the Lake Hawea residents.
The developer had gone to "great lengths" to provide for water supply and wastewater infrastructure.
Community association development subcommittee chairwoman April Mackenzie said the Lake Hawea community would "continue to fight it with all means at its disposal - legal, political and electoral - and for as long as it takes".
The council recommendation will go to Associate Minister for Housing and Urban Development Jenny Salesa, who indicated to the Otago Daily Times in August she "may consider" visiting the town.
