Almost £3m will be spent to build 18 new homes on the site of a former shoe factory - but council leaders say eco-measures have delayed other schemes.
Norfolk County Council's Conservative-controlled cabinet has agreed to pump the money into the new properties in Norwich's Mousehold Lane.
The 12 apartments and six bungalows will provide housing for people who need extra support to live independently.
The cabinet agreed on Monday (October 7) to use £2.95m for the scheme at the former Start-Rite shoe factory site, but council leaders said similar projects had been held up by the nutrient neutrality issue. This has stopped homes being built across Norfolk.
In March 2022, councils were told by government advisors Natural England they could not permit housing applications within catchment areas of the River Wensum and the Broads over concerns nutrients created by development could go into waterways and harm species.
Councils were told developments had to prove they would not lead to an increase in phosphate or nutrient run-off - or if they would, measures would be needed to offset the pollution.
That has led to schemes such as offering free septic tanks to people and paying a farmer almost £1m to stop his land being used to rear pigs, which were causing pollution.
Council leader Kay Mason Billig said it was a "shame" the "badly-thought out new regulations" around nutrient neutrality had delayed development.
Alison Thomas, the county council's cabinet member for adult social care, said she hoped more schemes would now come forward.
The council says 181 such specialist homes are needed across Norfolk and approved investment in a similar scheme in Swaffham last year.
Mrs Thomas said she hoped such schemes would become "the norm, rather than the exception".
Specialist provider Golden Lane Housing will build the new homes on Mousehold Lane, with work due to start early next year.
The council will get nomination rights to house adults with learning disabilities, autistic people and people with physical disabilities in the new homes, which will be specially designed for their needs.
The land at Mousehold Lane once housed the Diana Works factory which produced the famous Maclaren ‘Mac’ handbags.
It was taken over by Start-Rite Shoes before closing in 2004, after which it was demolished.
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