Located on the northern boundary of the city, near the Pleasant River estuary, the farm park has been approved by a Dunedin City Council hearings panel after a resource consent hearing in February.
Peter and Irene Walton had applied for subdivision and land use consents to establish a 26-lot farm park off Thorburn Rd, near the boundary of Dunedin city and the Waitaki district.
The Waltons could not be contacted yesterday.
The hearings panel was Crs Colin Weatherall (chairman), Andrew Noone, Richard Walls, and Waikouaiti Coast Community Board chairman Alasdair Morrison.
Consents were granted for 22 lots for residential buildings, all on lots smaller than that allowed by the council's district plan.
Most of the lots were to be less than 1ha, while the district plan recommends rural zoned lots of at least 15ha.
Two of the remaining lots would be owned by the residents, while a 26ha lot of estuary flats would be vested in the Crown.
The remaining 262.5ha would be a working farm, and would not be owned by the lot holders.
Mr Walton had said at the hearing the farm was marginal, and long-term had a gloomy outlook.
Farm parks had been established in the North Island and Queenstown, but this was the first of its kind in Dunedin.
In its decision, the panel said the proposed subdivision related well to the district plan, and was an innovative use of the land.
A farm park would meet a demand for rural living, while minimising adverse effects on the environment.
The residential lots would be situated in relatively remote areas and most uninformed people would not be aware of the development.
The proposed houses were not expected to significantly compromise the open nature of the rural landscape in the area.
The property and proposal could be seen as a "true exception" to setting a precedent.
The property had a large area of land which was to be vested in the Crown, while restoration of estuary flats would provide significant benefits.
The 22 dwellings would have limited visual impact, and would allow the farm property to continue as a viable economic unit.
"There will be few other properties able to recreate this model of development at a comparable scale, and with so few adverse effects on the environment," the report said.
The consent was granted for 10 years with the first stage of development set to be a replanting programme, and the restoration of the estuary.
