Wellington City Council has opted at the last minute not to approve a special housing area in Thorndon, where there were plans to build 31 apartments

The council's city strategy committee recommended on June 9 that a site on George St become a special housing area. But at a full council meeting on Wednesday, final signoff was refused.

As part of a deal with the Government in 2014, the council has the power to establish special housing areas to address housing supply shortages.

It means consent for certain residential developments can be fast-tracked, and gives developers the ability to push through applications without the need for public notification.

Councillors opted not to proceed with the Thorndon special housing area after locals raised concerns about a lack of consultation.

Thorndon residents did not attend the council meeting. But Lambton ward councillor Nicola Young spoke about their growing concerns.

"We have the spectre of the Mary Potter Hospice hanging over this project and it shares the same architect, so they are concerned about aesthetics and parking," she said.

"They are not against the idea, in principle, and would just like a bit of an idea of what it will look like."

On Thursday, Melissa Ludlow from the Thorndon Residents' Association said they were not opposed to special housing areas and wanted wider community engagement and assurances about quality building and good urban design.

The disquiet was because of a lack of detail and community consultation, and potential detrimental effects on neighbouring residents.

"We want to do our bit for the good of the wider city. We would just prefer they go through the [Resource Management Act] process that has more transparency and gives some time to allow the community conversation."

Presbyterian Support property director Gerard Logan, spoke before the meeting to urge councillors to accept the recommendation for a special housing area.

They had considered a meeting with residents on May 30 as "positive and open engagement" and were "perplexed and disappointed" they had gone to the council, he said.

"The actions of the residents has reinforced our concerns that they will seek to block the development, by whatever means."

Preliminary plans for the contemporary-designed 31 duplex apartments - a mix of one, two and three bedroom units - were within the 10 metre height limit and would maintain generous parking, Logan said.

They indicted they would have to weigh up whether it was still worthwhile pressing ahead the project without the special housing area in place.

Last month, councillors voted to ask the Government to add affordability to the special housing area criteria.

At Wednesday's meeting, Wellington Mayor Justin Lester warned the council would not be supporting further applications in the city unless they included components of affordability.

Councillor Brian Dawson, said the council needed to be cautious about approving new special housing areas.

"We have learned as a council that we bypass the voice of the community at our peril."