EPSOM residents are celebrating a "win for the people" after City of Greater Bendigo councillors opposed a controversial development at Howard Street.
All neighbours directly bordering the proposed development - to build 18 single-storey units on one block - opposed plans.
Councillors last night went against an officer recommendation and rejected the proposal, which has been to the Victorian Civil and Administrative Tribunal once before.
The proposal will go back to tribunal after the council failed to act on the application within statutory time frames.
The applicant applied for it to go back to the tribunal following council inaction.
Andrea Metcalf, who spent $7500 fighting the initial proposal, said this was "proof" that council had "sat on its hands" until now.
"Several councillors acknowledged that there has been no consultation with residents at all with this application despite 30 objections being received," Ms Metcalf said.
"Residents have been shut out of this process by the developer's deceptive tactics to bypass council process.
"We are grateful to the ward councillors for their strong support of the residents' stance and commitment to partnering with us at the forthcoming VCAT hearing."
She said residents were thrilled the councillors opposed the development on flooding as well as neighbourhood character.
The area is within a floodplain, with councillors mostly agreeing the development was "totally inappropriate" for the site.
"We have spent a considerable amount of time going through the planning officer's report to provide additional information to councillors to support our position," Ms Metcalf said.
"We are thankful they have taken into account the lived experience of the residents in this area. Several councillors acknowledged that the proposed development would have detrimental flooding implications for residents and this is consistent with our stance from the beginning of this proposal."