Leeds City Council's interim affordable housing policy, agreed in February, included a provision to reduce the percentage of affordable homes that developers must include in their schemes in an attempt to stimulate the local housing market.
But councillors say that six or seven developers, who before the policy was introduced used appeals to overturn refusals of their applications to build on greenfield sites, have since used the interim guidance to resubmit applications that include fewer affordable homes.
Phil Crabtree, the council's chief planning officer, said: "Councillors have become aware that some developers who have benefited from recent appeal decisions for developments with higher levels of affordable housing are now resubmitting applications with the lower targets agreed in February."
A report by the council's regeneration scrutiny board, discussed last week, said the new policy "has resulted in the majority of developers reneging on previous undertakings and providing reduced numbers of affordable homes".
The board recommended that the council's executive board should debate whether or not to reinstate the 2008 housing targets that were in place before the interim policy was adopted. A spokesman for the council said it was likely that this would be discussed early next year.
Mark Lane, a partner in the Leeds office of planning consultancy DPP, warned that the council could "stifle development" if affordable housing requirements were increased.
He said: "It's not developers being greedy. The council's own studies found that housebuilding is not viable in certain areas in the city with certain rates of affordable housing."