Plans to build 39 new homes on a public car park in Lancaster city centre have been recommended for approval.
The scheme at Nelson Street will provide 35 apartments and four town houses, as affordable housing, should the proposals get the final go-ahead.
Lancaster City Council planning committee is expected to make a final decision on whether to grant planning permission, at a meeting on Monday October 27.
The application is for four dwellinghouses, two four-storey apartment blocks and one two-storey apartment block with associated parking, landscaping, public realm, associated infrastructure and alterations to the canal wall.
The scheme would be made up of 32 affordable rented homes, and seven shared ownership homes, with a mix of house types including one, two and three-bedroom.
A Lancaster City Council report, which recommends that the scheme be approved, describes the plans as the "first step in the delivery of a wider reaching regeneration objective for the Canal Quarter area".
It also says there remains a "significant shortfall" in housing supply in the Lancaster and Morecambe District.
"Furthermore, there is an acute undersupply of affordable housing within the district," says the report, published this week ahead of the meeting.
"The proposal would deliver a 100 per cent affordable housing development, to include the provision of 39 dwellings to meet a mix of affordable housing needs and tenures.
"This would to a degree help address the significant shortfall in the five-year housing land supply position and, perhaps more importantly, the acute undersupply in affordable housing.
"The proposal will also result in the redevelopment of an existing brownfield site and will provide the catalyst to unlock the wider regeneration opportunities set out within the Canal Quarter Masterplan.
"The proposal represents an inclusive and sustainable design that successfully incorporates and enhances existing pedestrian linkages and secures new pedestrian linkages to the canal towpath, to the benefit of residents and the wider community.
"Attractive on-site open space along with highly sustainable and adaptable accommodation lie at the heart of the scheme and will promote a healthier and sustainable place for future residents and the existing community."
The new housing is part of Lancaster City Council's long-held ambition to develop the Canal Quarter area of the city, transforming derelict and underused land into a brand new neighbourhood.
There are also longer-term plans to build on car parks on St Leonard's Gate and Edward Street.
Pans have been opposed by residents and Lancaster business owners, who are worried about a potential loss of parking spaces.
The planning committee meeting starts at 10.30am at Morecambe Town Hall and is open to the public.
Read more: Plans go in for 39 new homes on Lancaster city centre car park - Beyond Radio
New strategy approved for Lancaster city centre car parking - Beyond Radio
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