She said there was a decent amount of vacant space at first floor level, which could be utilised for residential development.
There would also be exemptions made to parking and outdoor space requirements, which would help increase development, Gaffaney said.
Submitters who spoke at Monday's hearing were in support of the proposed change.
Submitter Marina Dinsdale said going to cities which allow inner city living, such as Auckland, Wellington and Palmerston North, showed the obvious benefits.
She said the having people in the city centre at all times increased security and it would also help with the current rental shortage.
"It's great to think we could be utilising quite a few empty spaces upstairs in Hastings."
She said that lots of people moving from New Zealand's main centres into provincial cities were not after a house in the suburbs, but were happy living in an inner-city apartment.
"There is a kind of niche people that do go for that sort of lifestyle."
The Hawke's Bay District Health Board also submitted, largely in support of the proposal but with a few concerns.
Medical officer of health Dr Nick Jones said the DHB was concerned about the possibility of small, studio apartments.
"That would be putting us more at risk of getting into slum development we've seen in other places.
"From a purely public health point of view, confined, small spaces, especially when they become overcrowded, are associated with increased infectious diseases."
Orginally the plan would have allowed studio apartments 35sqm in size, but this was updated to 40sqm.
A one-bedroom apartment would have to be 50sqm, a two-bedroom 70sqm, and a three or more bedroom 90sqm or over.
He also raised concerns around noise and ventilation, with double-glazed windows being used as a means of noise control, which meant people would have to keep them shut and be unable to ventilate their homes.
The hearing was chaired by Councillor George Lyons, and councillors Bayden Barber, Wendy Schollum, Rod Heaps and Tania Kerr all sat on the panel, as well as externally appointment member, Peter Kay.
Following the public submissions, the meeting went into public excluded deliberations.