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Award-winning Dunedin architect Gary Todd said he was part of a group exploring the raceway’s potential as a "catalyst site" to regenerate the area.
A mix of social, community and private housing was envisaged, Mr Todd confirmed.
The possibility of wetlands and pumping stations at South Dunedin parks would also be explored, including at Forbury Park, he said.
Mr Todd said it was an aspirational vision, but one based on solid evidence.
He emphasised the project would need to be a collaborative effort involving public and private bodies and community input would be crucial.
The raceway is owned by the Forbury Park Trotting Club, which plans to move from the 12ha site.
The Government is aware of the housing proposal and at least one minister is understood to be impressed by the extensive scale of the potential development.
Architectural designer Jasmax, Dunedin Mayor Aaron Hawkins and Taieri MP Ingrid Leary have also taken part in discussions.
Mr Todd, who described himself as an architect with an ecological conscience, shared his vision in the few minutes he was allowed at a Dunedin City Council 10-year plan hearing this week.
Housing design in South Dunedin could be relocatable and resilient to all hazards, suspended above raised ground levels to counter sea-level rise and surface flooding, he told councillors.
The 10-year plan was an opportunity to impart a vision "putting nature and the community at the heart of our future".
Restored wetlands could be part of future-proofed solutions for Dunedin, he said.
"There’s a lot of legs to this vision. It’s not just an idea."
South Dunedin is home to about 10,000 people and there is national interest in how the area adapts to challenges such as sea-level rise.
Mr Todd is due to talk to Otago regional councillors about the group’s vision next week.