Shoebox apartments are off the table in Auckland after councillors ruled them out of the Unitary Plan.
Councillors voted 17 to 3 to keep the minimum size for apartments, which is currently 35sqm.
The plan sets a blueprint for Auckland's growth over the next 30 years, when one million extra residents are expected in the city.
An Independent Hearings Panel, which reviewed the Unitary Plan, suggested minimum apartment sizes should be scrapped.
But council officers urged councillors to reject the idea, saying minimum sizes for homes were essential to protect the "social wellbeing" of the community and meet residents' day-to-day needs at home.
Councillors Dick Quax, George Wood and Penny Webster were the only members to vote that the rules be scrapped.
Councillor Quax said Auckland had a need for micro-apartments in the mold of those in major cities overseas.
The minimum sized apartment in London is 19sqm - while in Paris, the smallest are just 9sqm.
But Mayor Len Brown told the meeting Aucklanders are moving quickly to apartment living - as evidenced by the 44 percent of building consents that were issued for apartments in the last nine months.
"We're not debating whether it will happen, should happen or might happen. It's done," said the Mayor.
Mr Brown said that showed the current system was working and there was no need to abandon the minimum sizes.
"People are voting with their chequebooks," said Mr Brown.
The proposal was one of many tweaks put forward by the Independent Hearings Panel and considered by the council over the last two days.
Earlier today councillors voted to relax the rules for city's Rural Urban Boundary - a line on the map which defines where urban developments can be built and which areas are reserved for rural use.
The change means developers can apply to move the boundary, which previously only Council or the Minister for the Environment could change.
Two controversial changes were approved yesterday - the removal of a ban on demolishing buildings constructed before 1944, and the removal of a protection for 2200 sites of cultural significance to Auckland Maori.
The Unitary Plan is the council's primary tool as it seeks to find room for 422,000 new homes.
There is an estimated shortfall of 40,000 homes in Auckland, and 13,000 more are projected to be needed every year.
Councillors will continue to deliberate the changes before the final plan is made public on Friday next week.