Mr Allen said the project arose from concerns raised by councillors earlier this year about homelessness and social and affordable housing in Hawke's Bay.
A working group was formed with representatives from council, Te Taiwhenua o Heretaunga (TToH), U-Turn Trust and Te Aranga Marae to
evaluate the best options for further development of the land owned by the council and TToH between Kirkwood Rd and Mitchell Pl/Boston Cres in Flaxmere.
To date an initial business case had been completed and sets out the goal of the village which was to provide affordable, quality homes, housing a range of people from young to elderly in houses of varying styles and sizes.
Within the 15.5ha of land 3ha of Hastings District Council-owned land was proposed to be a food forest, 2.2ha was the Te Aranga Marae community garden, 8ha was Te Aranga Marae and its grounds which would include a common houe facility, and 9.4ha was residential zoned land.
Also included in the design was a healthy cafe and co-operative community corner shop, a small business incubator, a wellbeing centre and carparking, with a focus on providing green spaces and a sense of shared community, although houseowners lived independently.
The homes would be priced between $140,000 and $375,000 depending on their size, and TToH aimed to offer different ways of home ownership including subsidised rent to buy, assisted ownership, long-term rental and private ownership.
At this stage the business case did not provide any detail on how the development would be undertaken or how it would be funded, said Mr Allan.
"A much more detailed proposal will come back to council that will further investigate the delivery of such a development."
In the meantime, however, the council gave its support to the development in principle, which would enable TToH to approach and consult with the community, other organisations and agencies to secure support and understand the potential financial investment opportunities.
Acting mayor Sandra Hazlehurst said the council had been part of the journey for a number of years and congratulated the team for the business case that was presented.
"This is more than affordable homes, it's providing a community and village which is very exciting."