A housing development criticised by New Zealand First leader Winston Peters is being built according to the rules, Auckland Council says.
Land sold to a developer had been designated as a Special Housing Area (SHA), and Mr Peters said some of the built units would be housing crew from a Chinese airline.
He said this was not acceptable.
"The land was being designated for a Special Housing Area to expand the capacity of the Housing Corporation of New Zealand to do their job, was then flicked on to a developer who enjoyed the designation, but it ends up in Chinese hands and is literally a hotel for Chinese staff," he said.
The properties on Haverstock Road, Sandringham were sold by Housing New Zealand in 2013, after the corporation had first relocated tenants and demolished the homes.
In May 2014, the 51-unit development was given SHA status, allowing fast-track planning approvals and requiring five homes to be affordable.
The development is still under construction.
Auckland Council said in a statement the affordable units had not yet been built, but would be closely monitored.
The development had followed the rules, and the use of dwellings for corporate staff accommodation was quite normal, it said.
Mr Peters said New Zealand families were "booted out" of Housing New Zealand houses so the land could be developed.
In a statement today, Housing New Zealand said all tenants in the 19 properties were transferred to more suitable Housing New Zealand homes.
The agency said it had decided to sell the land as it would not have been cost effective to carry out a redevelopment in such a high-value area of Auckland.
"The sale of these properties provided Housing New Zealand with funds that have been reinvested in acquiring, building and improving social housing in other parts of Auckland, such as Three Kings, where Housing New Zealand built a 22-unit complex."
The SHA schemes in the region were disestablished in September 2016 when the Auckland Unitary Plan came into force.