Jersey's planning committee has rejected the plans to build more than 130 new homes at South Hill.
Concerns were raised over the size of the flats and the lack of sunlight that they would receive meaning developers now have to go back to the drawing board.
For Jersey housing minister, this rejection slows down the plans to build urgent accommodation on the island.
He says: "We have this big plan to get 3,000 affordable homes out by 2030 and also got another 1,000 or so homes in the private sector so everybody is doing their bit or got to do their bit to make sure we have sufficient homes to accommodate the needs of the island."
All building applications sent to the committee are accompanied by a recommendation from the island's Planning Department - in this instance, it was advised the committee approve the plans.
There are a number of other applications to be considered on today (16 March).
They include plans for a 50 bed care home to be built at Fauvic Nurseries.
Those proposals also include building a fundraising shop on the grounds, and some woodland space for people to enjoy.
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