Where's the logic in that?

Houses are like cars. When you build an expensive house (or car) for someone who is rich, they leave a lower-cost used home (or car) behind, available to be filled by someone who is not so well off. The more 'unaffordable' homes you build, the more affordable homes come onto the market when the people leave their old home to move into the new home.

But the fine means that developers have to limit themselves to only the most profitable houses, which means the still pretty profitable houses, but not attractive enough once the fine is paid, go by the wayside. And, therefore, fewer affordable homes come onto the market.

Was council trying to make housing even less accessible?