Residents are concerned about sex workers in Christchurch's St Albans about three months after the council rejected a bylaw, favouring instead a community-based approach.
Some St Albans residents have complained for months they have been abused by sex workers, with their properties vandalised and their driveways often littered with needles and condoms.
Some said they were "dreading" the Christmas period, which usually came with higher numbers of sex workers.
A spokesperson for the St Albans residents, Matt Bonis, said there were sex workers outside of his family home on a regular basis over Christmas.
"It's not going away like it was promised," he said.
Christchurch City Council had been grappling with how to deal with the situation.
In October, it threw out a bylaw proposed by the residents which would have limited where sex workers could work, opting instead for a community-based approach backed by the New Zealand Prostitutes Collective and police.
Mr Bonis, who had been pushing for regulation, said increased media exposure and intervention from Christchurch Central MP Duncan Webb, a former lawyer, had helped somewhat.
"It's certainly better, in fact it's quieter and it is less frequent than previous summers, but the problem is not going away," he said.
He said there recently had been one or two sex workers outside his house on at least two out of three nights.
The Ombudsman launched an investigation over Christmas into the council's decision to not apply its Public Places Bylaw to the sex-worker situation.
Mr Bonis and Mr Webb had pushed for the council to apply the bylaw, which prohibited street-based commercial activity, but it decided that because it was almost impossible to prove a commercial transaction was taking place the law did not apply.
The Ombudsman wrote to Mr Webb on 22 December, confirming they would investigate the decision whether it was reasonable.
Mr Bonis welcomed the investigation, but New Zealand Prostitutes Collective spokesperson Catherine Healy said she hoped it would prove the council had made the right decision.
"We hope it will be another result that favours what the council has already determined, that a non-regulatory approach was the way to go," Ms Healy said. "We will just have to wait and see."
The New Zealand Prostitutes Collective had strongly opposed regulation, saying it did not want to return to "the dark days of regulation".
Ms Healy said the Prostitutes Collective were working with the council to establish how the community-based approach would work, and had meetings planned for the new year.
Christchurch City Council declined to comment today, with a spokesperson saying they had nothing further to add.