A new plan to make Dublin's Oscar Traynor Road site 100% social, affordable and cost rental has been passed by city councillors.
The development of 853 homes has been stalled for a year since councillors rejected a deal with developer Glenveagh that would have involved 50% going to the private market.
The agreement of councillors was required as the development involves the disposal of state owned land and it was passed by 36 votes to 23.
A new deal was drawn up with Glenveagh that would eliminate the private housing and make it 40% social, 40% affordable and 20% cost rental with units being sold by the developer to the council and approved housing bodies.
This proposal was accepted by Fianna Fáil, the Greens, Fine Gael and most Labour councillors who have said it represents the best possible deal for much needed housing.
Sinn Féin, the Social Democrats, People Before Profit and some individual councillors voted against, saying that the council should build the units directly.
However, assistant chief executive David Dinnigan said the project would be delayed by at least four years if the council had to take it over and go through the procurement and approval processes.
He said that the increase in construction cost would 'eat up' any saving to be had by hiring contractors directly.
Mr Dinnigan also said that the council would have to pay for the infrastructure which would push up the price charged for cost rental units and that it was not certain the council could get finance for a scheme of the same quality.
There was criticism from some councillors about the amount tenants would pay for cost rental units which start at €940 a month for a studio.
The affordable purchase homes will be sold at prices ranging from €230,000 for a one bed up to a maximum of €320,000 for a three bed.
Some councillors argued those prices were not affordable and there was concern at the amount of state subsidies being paid.
Independent councillor John Lyons said when the developer's profit and state subsidies such as the affordable purchase scheme and serviced site fund are taken into account, the total cost of outsourcing the construction to a developer will be €121 million.
Councillor Lyons also said the premium being charged by the developer works out at €68,000 per unit.
However, a spokesperson for Glenveagh said it would cost the city council much more to build the units particularly because of the inflation in construction costs over the past year.
Glenveagh's construction costs are fixed at 2020 levels and work out at €370,000 per unit once the €14 million payment to the council for land is taken into account, according to the spokesperson.
They said the council is currently quoting its own construction costs at €444,000 per unit - an extra €74,000 per unit.