The Auckland Council, which is debating the city's development plan, has rejected the idea of an affordable home quota for larger developments.
Councillors voted 13 to seven against the quota being included in the Auckland Unitary Plan, with most arguing there were other ways to ensure affordable homes in the coming decades.
The council had proposed the idea to the independent hearings panel that rewrote the plan, but staff planners later agreed with the panel's view that the idea be thrown out.
Mayor Len Brown failed to sway the meeting, saying he'd had to fight the government to get quotas written into the Housing Accord, and it was too early to give up on the idea.
In an emotional address, deputy mayor Penny Hulse said, while she originally backed the idea, she believed the focus should be on ways to make affordability the norm, and she would not support a populist move.
The failed idea was to designate 10 percent of larger developments as affordable homes that could be sold, and re-sold, only to buyers who met income criteria.
Earlier, councillors also rejected a proposal to scrap the minimum size of a city centre apartment.
The council voted to retain minimum sizes of around 35sqm for a studio, or 50sqm for one bedroom or more.
It overturned a recommendation from the independent hearings panel, which had wanted to scrap the minimum.
The size rule still allows smaller apartments if a developer can persuade the council that good design makes the dwellings of good quality.
Councillor Dick Quax argued that micro-apartments would be cheaper, and people should be allowed to buy them if they chose to.
Ms Hulse said the council had promised Aucklanders that higher density would be done well, and some controls such as minimum sizes were needed to ensure that happened.