Napier City Council has backed out of plans to sell land to Kāinga Ora after a residents' association took legal action.
100 homes were to be built on Prebensen Drive - but neighbouring residents weren't consulted on the pre-approved decision.
The council says it called off the sale because it didn't want legal fees to take away from cyclone recovery spending.
The Mayor of Napier and Kāinga Ora were both unavailable for interviews.
Ngāti Kahungunu chair Bayden Barber spoke to Corin Dann.
