The panel said damp and mould inside the units "compromises the quality of life and amenity values".
An arborist advised that pruning to let the light through would halve its dense foliage and merit for scheduling.
People need to apply for resource consent for works proposed on, near or under scheduled trees.
Residents' spokesman Dene Bowmar said the decision was common sense "because it's in a bad spot" and offered the prospect of work that would be fair to residents.
However, the tree's owner said he was surprised it missed out on protection because it had scored highly in the arborist's checks.
A Howick land owner, Kevin Farmer, failed to persuade the panel to leave his pohutukawa and a Norfolk pine off the schedule.
The Herald reported the felling of several other trees on his property at 96 Marine Parade in January, when the Government removed general protection of trees on private urban land.
At the time, the felled trees were nominated for the protected schedule.
Mr Farmer said the two remaining trees would restrict future development of the site.
The panel said he gave no proof of development plans and could put his concerns when he applied for a resource consent.
In Manukau, arborists assessed 742 individual and groups of trees before putting forward about 200 for adding to the schedule.