Tauranga City Council has voted in principle to buy Bella Vista Homes declared uninhabitable.
Homeowners thought they had bought their dream homes in the development in Pyes Pass, but it quickly became a nightmare.
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The developer of the failed subdivision went into liquidation - and when Cyclone Hola hit in March, they were asked to evacuate.
The 21 houses were deemed unsafe after a variety of defects were found.
Paul Heath QC conducted a review into how the council handled the situation and criticised their actions.
"The Council did not perform monitoring and enforcement functions adequately in relation to geotechnical aspects of the intended construction works," it said.
"The Council did not perform its Building Act inspection functions adequately, in respect of both geotechnical and structural considerations."
On Wednesday homeowners told the council how they felt after being removed from their homes.
"Our dreams were shattered, our beautiful family home was not safe and we could never go home," said homeowner Jenny Coffey.
The homeowners have spent months living in motels or with family, and the ordeal has taken a toll.
One person affected said they can no longer sleep without sleeping pills. Others said they'd got sick due to stress and their children are suffering too.
"I'm petrified, with no home to offer them, I might lose custody of my girls - and my girls are my world," said owner Tony Mann.
Four of the properties were given code of compliance, and had been lived in for an entire year before the evacuations took place.
With a unanimous voice, the owners made it clear they wanted to be bought out at market price - and they want compensation for what they've been through.
"All we did was buy a house and put our trust in the process," said Ms Coffey.
They all feel let down by the system, a system they say they'll never be able to trust again.