ASCOT residents say they will fight to get the area rezoned after Victoria's planning tribunal once again knocked back a controversial development at Howard Street.
Spokeswoman Andrea Metcalf said residents were in discussions with Planning Minister Matthew Guy and the City of Greater Bendigo to prevent future high-density development in the street.
Residents have opposed the development of single-storey units at 73 Howard Street since 2012, saying it is not consistent with the surrounding area and posed serious drainage concerns.
Councillors and VCAT both knocked back the original proposal of 29 low-cost units.
The revised proposal came before the tribunal again in June this year following City of Greater Bendigo's failure to determine a permit application for 19 dwellings within the prescribed time.
In rejecting the application, VCAT argued that the site was not appropriate for high-density development due to flood risk.
"The review site is complex and, while the current proposal improves on the previous design, multiple concerns with the design and layout, and the ability to address inundation and overland flows across the site, lead to our decision not to grant a permit," the report said.
Ms Metcalf said residents had spent $25,000 taking the matter to VCAT for a second time and wanted to prevent any more applications going to council.
"This is the second time the council's planning department have supported the application when councillors and residents and VCAT rejected it," she said.
She said residents were calling on council to consider VCAT's decision and rezone the site.
"We have spent countless time and money on this and just want to protect it from any future development," Ms Metcalf said.