Willowridge Ltd, a company directed by Wanaka property developer Allan Dippie, has built seven villas on a 8476sq m site located at the end of residential cul-de-sac Hyland St.
The company has building consent to develop the site by constructing another 10 units and Mr Dippie told independent commissioners John Matthews and Gillian Macleod prospective buyers had inquired whether the villas could be run as visitor accommodation.
Before Willowridge entered into a contract to sell any of the villas, it sought consent for the whole site to be used as visitor accommodation to avoid future individual owners applying for resource consent on an "ad hoc" basis, Mr Dippie said.
However, 21 neighbouring home-owners have submitted their written objection to the proposal on the grounds it would create adverse effects and was inconsistent with the area's low-density residential zone classification.
Mr Dippie said the definition of what constituted visitor accommodation in the lakes district was topical - being the subject of the council's proposed plan change 22 - and the activity formed a necessary part of the region's economy, especially during winter when accommodation was in high demand.
Visitor accommodation was a discretionary activity in a low-density residential area and Meadowstone property owners, "like others across Wanaka", already leased their homes to visitors.
He claimed the villas would be bought and used primarily as residential homes.
The owners could use the dwellings on a secondary basis as visitor accommodation, managed under a body corporate agreement, and leased to visitors over the Internet as a short-term holiday home.
The villas were not a motel or hotel, because they were stand-alone, self-catering units, with little signage, no "front of house" service, and would not have any communal facilities, such as a pool, Mr Dippie said.
Michael and Jean Nelson, who own a neighbouring property, said the development was steering in the direction of a motel.
However, they conceded any adverse affects from the use of the villas as a short-term visitor accommodation complex would be less than potential "long-term" individual leasing arrangements to "young" winter skifield visitors.
The hearing continues today with submissions scheduled to be heard from other neighbours and Willowridge.
