Developers will have to include low cost housing in a controversial Auckland residential development, as promised.
The prime real estate in the suburb of Sandringham was once home to 19 state houses but is now a private development.
Housing Zealand sold the Haverstock Road properties five years ago to developer Fang Feng as a special housing area, one of several established to help solve a critical shortage of homes.
"For the Government to sell off houses that were supposed to be homes to people in this community is devastating," said Glenda Fryer of the Albert-Eden Local Board.
Under the deal, 10 per cent of the houses built on the site have to be low cost housing.
But a photo taken at a recent event has locals seething as it appears to show two large apartment buildings will be used to house China Southern Airlines staff.
A person from the development confirmed to 1 NEWS that the buildings will be leased to China Southern Airlines for their crew who will stay there on short term layovers.
"It's not going to be a community. They've been sold off essentially to foreign interests," Ms Fryer said.
Because the buildings are being leased to the airline, it can have whoever it wants staying there.
Auckland council says it doesn't consider it a hotel but the developing company must adhere to the 10 per cent deal it made for low cost housing on the rest of the land.
"Of the 51 one houses that are being constructed, five houses need to meet affordability criteria. We've explained the conditions to the consent owner in full and we are in contact with them on a regular basis, approximately fortnightly, said Ian Smallburn of Auckland council Resource Consents.
Ms Fryer said she would have liked to have seen the Government own the land and "develop it for people that are really in need of homes".
But Housing New Zealand says it sold because it could put the money to better use elsewhere.