Dublin city councilllors have given the go ahead for private housing to make up 50% of the regeneration of O'Devaney Gardens.
The estate is due to be redeveloped into a total of 479 units with the remainder being 30% social and 20% affordable or cost rental.
Councillors previously voted to have all the housing units either social or public cost rental.
However, DCC Chief Executive Owen Keegan said this was in breach of planning permission and the policy of central government that was funding the scheme.
Councillors voted this evening by 40 votes to eight to accept 50% private development with some left-wing councillors opposing the motion.
An amendment proposed by Éilis Ryan of the Workers Party to have social and affordable percentages describe as minimums was defeated.
The O’Devaney development is part of a new form of public private partnership called the Land Initiative, which the city council hopes will provide a total of 1,345 homes and also involves two other sites at Oscar Traynor Road in Coolock and St Michael's Estate in Inchicore.
Private developers will be allowed to build on council-owned land as part of a master plan that involve an agreed mix of private, social and affordable housing.
Dublin LPT rate to remain same in 2017
Meanwhile, Dublin city's property tax will remain the same for next year after councillors voted to keep a 15% reduction in the rate.
Council management had urged councillors to impose the standard rate with no reduction, which they said would bring in nearly €12m more to fund local services.
However councillors voted by 40 votes to 8 with one absention to keep the reduced rate. The cut was supported by a range of parties including Fine Gael and People Before Profit.
Dublin city will collect an estimated €77m in property tax for 2016, but €15m has to go to an equalisation fund to top up other local authorities with lower tax income.
Councillors were told that income will be up €2m next year but that because of variations decided by the Revenue Commissions the actual amount going to the council will be €160,000 less.
Valuations made in 2013 still apply meaning a house then valued at €325,000 will be liable for a tax bill of €497.25.
