Council staff have recommended the controversial Laurel Hills housing development be given the green light - but warn council will have to balance the need for housing with easing traffic congestion.
In a report to councillors ahead of Thursday's full council meeting, staff say the Special Housing Area proposal for Ladies Mile should be approved in principle.
The development would consist of 156 homes built on 9.4 hectares of land along Ladies Mile.
The proposal sparked heated opposition from many residents of Shotover Country and Lake Hayes Estate, with particular concern around increased traffic congestion in the suburbs and along State Highway 6.
Council staff noted that concern in their report, saying council will have to ''reconcile the obvious transport challenges with the physical limitations of roading infrastructure, the need to encourage mode shift, the high percentage of single occupancy vehicles and the urgent need to provide more housing, given the most unaffordable house and rental prices in the country''.
''The district is facing a severe housing crisis in terms of rental costs and house prices being the highest in New Zealand, and the Expression of Interest would provide additional supply in a timely fashion.''
Public consultation on the proposal closed last Friday.
