Almost 70 "affordable" homes could be built on a former school in Peterlee.
On Tuesday, planning bosses at Durham County Council gave the green light to plans to develop the land where Eden Community Primary School once stood.
The application, by Galliford Try, proposed 67 properties be built on the site in Robson Avenue.
Developers have also promised all the homes will be "affordable", with 25 houses available through the 'rent to buy' scheme.
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This allows tenants to save for a deposit by paying a reduced rent, with them later given the chance to buy their home outright five years into their tenancy.
The remaining 42 properties, which includes 19 bungalows, will be available at an "affordable rent".
Developers have also agreed to stump up more than £170,000 towards added infrastructure.
This would include:
- £50,692.87 for the Durham Coastal Management Plan
- £116,203.50 for play facilities in the council's Peterlee East Electoral Division
- £4,623 towards healthcare Peterlee East
Speaking at the area planning committee meeting, Coun John Robinson formally proposed approval for the scheme, saying: "It's affordable and there's no adverse impact from the proposal - what more could we ask for?"
However, concerns were raised about the design of the planned development.
"If it was in my area, at this level of density I would have opposed it," said Coun Owen Temple.
"Some of the separation distances are below what we would normally allow.
"I wouldn't be voting for this application, but I can understand if local members want this and it's not for me to propose to reject it, but it's also not for me to vote for it."
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