The City Council on Tuesday night approved a single-family home Planned Unit Development on Beason Drive after the number of units was trimmed from 64 to 51.
Two acres of the 11.87-acre site will be left as green space.
Donna Shepherd, project engineer, said 17 percent of the site is steep slopes and much of that will not be touched.
She said narrow Beason Drive will be widened and two cul de sacs would be added.
John Osbeck, one of the owners, said the location was once home to a gang that dealt in drugs. He said a house that was under remodeling was heavily vandalized.
Officials said under the current zoning that 44 duplexes could be put on the property that is on a hill near Highway 27 and Signal Mountain Boulevard.