The national state housing agency had hoped to recoup the costs after it cancelled the 12-home Albertson Ave project in Port Chalmers.
But more than six months after it first listed the land with Colliers, Kāinga Ora has gone to Trade Me asking for "inquiries over $412,500".
The land was put on the market in August with a deadline sale, which ended in October with no buyer, then moved to "sale by negotiation" until yesterday’s listing update.
Housing advocates have lambasted the approach, saying it devalues what was once set aside as a social asset.
West Harbour Community Board member Duncan Eddy said it was particularly galling, as the land valuation was $1.2 million.
"Kāinga Ora is so desperate to sell this land they’re willing to hock it off at for just over a third of its valuation. It’s disgusting."
"The land has been languishing on the market for 6 months. Its social value clearly exceeds its commercial value.
"Kāinga Ora should take it off the market, and get back to their original plan, replacing the state homes they demolished there with new social housing."
"There is a dire need for more social housing in Dunedin, and this site is perfectly placed for that purpose."
Kāinga Ora regional director Julia Campbell said they were comfortable with offering the Albertson Ave land for sale "at a price that reflects current market valuation".
So far, there have been 29 former state houses sold in the southern districts in the past two years.
It has come about after a review led by former prime minister Sir Bill English, which found the organisation had taken on too many properties and too much debt, and needed to consolidate its options.
Mr Eddy said prior to the land being put up for sale, there had been "state houses on that land for 80 years".
"It’s perfectly placed; it’s barely five minutes drive to the shops, and three minutes drive to the local library.
"No private developer wants the site; Kāinga Ora should do the right thing and develop the site for state housing."
