The Government has reinstated plans to allocate a percentage of the houses at Hobsonville Point in Auckland as affordable homes priced under $485,000.
In 2009, 100 of the 3000 homes at the development were tagged as affordable under the Gateway scheme, giving lower-income first-home buyers a helping hand.
Only 17 were sold, 14 for less that $400,000.
The price included the cost of the section, which was between $180,000 and $200,000 - which did not have to be paid for at least five years.
This meant the mortgage for low income families was manageable at around $200,000.
Today Mr Heatley said up to 300 houses would now be sold for less than $400,000 and another 300 would be sold at prices between $400,000 and $485,000.
Up to 80 per cent of the houses at Hobsonville Point would be priced over $485,000.
It is the first time since 2009 the Government has set out definitive quotas at the development.
Mr Heatley said the initiative would add to Auckland's housing supply and demonstrate innovative commercial market-based solutions that could be replicated in the affordable housing market elsewhere in New Zealand.
"It's generally understood that these price ranges are considered more affordable in the Auckland context,'' said Mr Heatley.
The Hobsonville Land Company, a subsidiary of Housing New Zealand, will introduce a simple scheme to prioritise home-ownership access to some of the houses.
The Hobsonville Point development is part of a number of other Government housing initiatives, including increased investment in social housing, reconfiguration of the $15 billion state housing portfolio to better meet need, $2b a year in subsidies such as the accommodation supplement and measures in response to the Productivity Commission report on improving housing affordability, said Mr Heatley.
But Labour housing spokeswoman Annette King said the policy didn't go far enough.
"The tepid response to National's lame housing strategy has shamed Phil Heatley into extremely half-hearted action in Hobsonville.''
Ms King said it was "underwhelming'' that only 600 homes had been tagged at Hobsonville Point development as affordable.
"New Zealand is facing a massive housing shortage which is pushing up prices, especially in Auckland. We need a nationwide solution, not a quick-fix attempt with photo-ops for John Key in his electorate.''
She said the announcement had been pulled together in a rush.
"National is trying to gloss over the major failings in their housing response but this announcement is way too little, way too late.
"This is a huge letdown to New Zealanders, especially those trying desperately to get on the first rung of the housing ladder.''
- APNZBy Kate Shuttleworth @K8Shuttleworth Email Kate