City council in Regina is OK with opening up a new neighbourhood in the north end, despite concerns over the proximity of the development to industry.

Council voted unanimously Monday night to let a proposed new subdivision proceed.

The Somerset neighbourhood will be sandwiched between the Evraz steel mill and the Co-op refinery and could be home to more than 3,000 people, according to the proponents of the project, B.C.-based Earth King Project 135 Ventures.

City council members agreed to the proposal, despite opposition based on health concerns and concerns about noise and odours.

Speaking to CBC Radio Tuesday morning, Mayor Michael Fougere said he expects there will be a market for homes in the proposed neighbourhood.

"What the developer talked about is that these would be more modest homes," he told Morning Edition host Sheila Coles. "They would not be high-end as you may have seen, so they're trying to get a perhaps entry-level coming into the market for housing."

Fougere also said the smell and noise from the refinery are not as bad as they used to be, thanks to a recent upgrade.

However, the Co-op refinery, the provincial Environment Ministry and the Regina Qu'Appelle Health Region have all recommended against the development.

The neighbouring rural municipality of Sherwood is also not in favour.

However, the city's administration said new homes would help alleviate Regina's housing shortage.

Officials added they were confident that concerns had been addressed and the city would make sure the developer and property owners are notified of the proximity to the refinery.

"We've asked that those concerns would be put on title, and the developer has agreed to that," Diana Hawryluk, Regina's director of planning, said. "So buyer beware. That would be on title, and people can make their choices."

Despite that, a senior official from the refinery said if issues do arise, new residents would likely raise the issue with local authorities and industry, not the developer of the neighbourhood.

"It will be us who will field the complaints not the developer," Vic Huard, from the Co-op refinery, told CBC News.

People who live in another, existing, development that is close to the refinery say smells can be common at certain times of the year.

"In summertime sometimes we can't go out because of the smell," Amalia Fuentes, who has been in the area for 30 years, said. "It's very hard, and people are complaining."

Council, on Monday, approved changes to the official community plan so the developer's plan can be submitted for formal approval.