Wangaratta council have been told they have "rocks in their heads" regarding a development application for Sarakos Circuit.
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Barry Thompson told councillors during Wednesday's meeting that there wouldn't be enough room for the proposed 11 units.
"I just think that there's nowhere near enough room down there," Mr Thompson told council.
"The street is quite narrow, the frontage of that property and the other property that is going to be developed down there has nowhere enough room."
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Mr Thompson told the meeting he had safety concerns about the street becoming congested with parked cars.
"It's going to be a major dilemma down there and I think the council needs to have a long hard thing about how they're going to do that," he said.
"I'm not against development, don't get me wrong, but development in the right areas, on the right blocks with the right type of buildings is what we're looking for.
"I think you've got it wrong in this case."
Despite the protests of Mr Thompson and Wangaratta mayor Dean Rees, the application was approved in a split 4-3 vote.
Mayor Rees advised council to vote against the application, calling it an overuse of the allotment.
"I'm probably the biggest pro-developer person in this room and in Wangaratta and I'm the one who is requesting council to knock it back, I've never knocked back a development," he said.
"Yes it fits into the planning scheme, well so does a brothel if it was to be applied for."
Councillors Jack Herry and Irene Grant spoke in favour of the proposal, noting the cities need for more housing.
"The housing situation at the moment is dire, in many rural areas, so the need for smaller and more diverse housing stock is evident," Clr Herry said.
"I think we're putting the cart before the horse in anticipating who and what sort of use these units are going to receive.
"They may be people who don't have an excessive amount of cars."
Councillor Grant said that she believed council had an obligation to approve the proposal because it was in line with the Wangaratta planning scheme.
"I think we also have a very strong obligation to ensure the permit conditions are followed," she said.
"It offers alternative housing and that's the way we have to look at it in this municipality, smaller and higher density, which is not only in line with current housing trends but what people are expecting in housing."
Councillors Herry, Grant, Fuller and Bussell all voted in favour of the proposal.
Mayor Rees and councillors Fitzpatrick and Benton voted against it.
