A borough councillor has suggested a change of role for Northampton Partnership Homes could help build affordable houses on the empty Greyfriars site, as well as throughout the town.
Councillor Brian Markham's (Lib Dem) idea was previously backed by Northampton Partnership Homes in 2016 when both parties submitted similar motions to a borough council meeting.
Last September, Cllr Markham called for a discussion on the creation of a development housing company - either as a joint venture with Partnership Homes or as a stand-alone entity.
His motion was eventually withdrawn because he was told Northampton Partnership Homes had already put forward one of their own which would see them create at least 100 homes per year for the next 10 years, and that their proposal amounted to the same as a local housing company.
This week news of the breakdown of the Greyfriars project was announced as a result of the developers not being able to build the agreed amount of housing.
Northampton Partnership Homes may be able to deliver the residential aspect as it had not been considered previously because it was not in existence when the Greyfriars proposal was drawn up.
"I very much appreciate the work that Northampton Partnership Homes is doing, particularly in Spring Boroughs," said Cllr Markham.
"They had looked into setting themselves up as a local housing company which would enable them to borrow money and get money from Northampton Borough Council to build more homes.
"This idea has not progressed very far.
"They could be an active developer and could use Government money to build more affordable housing in the town, which everyone says we need. But it's taken a long time for the administration to do it."
He added: "Northampton Partnership Homes could be investing in building homes on the Greyfriars site."
A development housing company is a private company limited by shares, where all the shares are held by the local authority.
A site already owned by the local authority would be transferred to the housing development company. A development may be funded through borrowing up to the permitted amounts and once built, the houses are either sold or rented out.
Money raised from sales or letting could then be used to fund a rolling programme whereby one project would be used to finance the next.
The objective is for housing development companies to be used to provide affordable housing and/or to unlock value from unused sites by selling or renting the houses that are built at market value.
"Give freedom to Northampton Partnership Homes and it's up to them to put that affordable housing," said Cllr Markham.
"There are lots of parts of town where Northampton Partnership Homes could develop but they need to be given the freedom to do that."
He added: "They could take a leading role but for them to be able to do that they have to be given the freedom."