Infinity Investments and Allan Dippie's Willowridge Developments and Orchard Road Holdings say the QLDC's plan change 24 - affordable and community housing - is a move towards social engineering and unfairly penalises developers.
The companies say the plan change is not permitted under the Resource Management Act and are appealing a preliminary Environment Court decision by Judge Gordon Whiting in July, which ruled in favour of the QLDC.
Infinity and Willowridge already have "stakeholder agreements" with the QLDC to include affordable housing components in their residential subdivision developments at Peninsula Bay, Riverside and Three Parks.
Willowridge also implemented its pioneering Kiwi First scheme - the first affordable housing scheme in New Zealand - independently of plan change 24 at its Lake Hawea subdivision, Timsfield, three years ago.
Mr Bretherton has told the Otago Daily Times he considers plan change 24 to be "completely unnecessary" and coming at a "phenomenal cost".
The Southland Times reported the companies contended the QLDC's plan change "smacked of Soviet-style planning".
Lawyer Christian Whata said it was not the business of council to take financial contributions to subsidise goods and services.
This would be a Soviet-style type of planning, which was not contemplated by Parliament under the RMA, and would see the council acting as Robin Hood, Mr Whata said.
"It's clearly taking money from one sector in the community ... and transferring it to a pool which is available to another sector of the community."
QLDC lawyer Graeme Todd told Justice Lester Chisholm the development companies were relitigating the Environment Court's decision and they had not presented any evidence that Judge Whiting had erred in law.
"The allegation is they [the court] didn't answer the question put to it. I think the court was clear that it wasn't in a position to do so," he said.
Companies would not face a compulsory affordable housing levy as it was envisioned as a discretionary power, he said.
"The plan change ticks all the boxes in terms of its legitimacy as a planning instrument and falls within all four squares of the provision of the Act," Mr Todd said.
The legal stoush between the developers and the QLDC is set to continue at another Environment Court hearing, when they will be joined by Queenstown-based Remarkables Park Ltd, which is also opposes plan change 24.
The QLDC are seeking a second decision from the court addressing how the plan change will deliver affordable housing.
Affordable housing plan change:
What is it?
• The council wants to "cement a mechanism in statute" by way of plan change 24 to address the housing crisis in Queenstown Lakes, which prices low-income earners out of property market.
History
• February 2005 - PC24 arises from council "Housing Our People in our Environment (Hope)" strategy workshops.
• October 2007 - PC24 proposal notified and put out for public consultation.
• July 2008 - Public hearing by independent commissioners to consider PC24 proposal.
• December 2008 - Councillors' vote split 6-6 on whether to adopt a recommendation from PC24 commissioners. Then mayor Clive Geddes uses casting vote to accept commissioners' recommendation.
• January 2009 - QLDC adopts PC24 in to the district plan.
• February 2009 - Developers Remarkables Park Ltd, Five Mile Holdings Ltd (subsequently placed in receivership), and a group made up of Wanaka-based Infinity Investment Group Holdings, Willowridge Developments Ltd and Orchard Road Holdings Ltd appeal PC24 to the Environment Court.
• July 2010 - Environment Court rules PC24 falls within the scope of the Resource Management Act and, as such, enables the QLDC to address housing affordability issues, before Infinity and Willowridge appeal the preliminary decision to the High Court.
Progress
• During the past eight years, the QLDC has signed seven affordable housing stakeholder agreements volunteered by developers for existing projects at Queenstown, Wanaka, Albert Town, Kingston, and Cardrona which will deliver more than 250 affordable homes during the next 15 years - without PC24.
