The Wollongong Local Planning Panel has rejected a five-townhouse plan for Thirroul - to the delight of neighbours - in a decision with implications for future development in the northern suburbs.
The independent panel also had a strong message for Wollongong City Council and the State Government: they should start taking a "holistic" view of the cumulative effects of traffic.
This was necessary to how much more development could be allowed in the area, given the capacity of the road network and worsening congestion in Thirroul.
The proposal to demolish the old house and build five townhouses at 28 George St was as an "overdevelopment" which was "out of character with both the desired and the future character of the area", the panel said.
The WLPP unanimously rejected the plan after a Wednesday night meeting at which many of the 31 residents who opposed the development got up and spoke.
The panel said it "would set an undesirable precedent which would not be in the public interest".
It had been recommended for approval by Wollongong City Council planners, but the WLPP rebuked them, deciding the plan was not demonstrated to be consistent with city planning rules, Thirroul in particular.
Nor had it showed the development was suitable for the site, nor that it would not have adverse impacts.
The decision lays out WLPP's priorities as it deals with a stream of townhouse and dual occupancy proposals north of Bulli Pass.
"As the road network is controlled by the NSW RMS and the council, the panel suggested that an holistic review of the cumulative impact of future development capacity aligned with that of the road network should be facilitated by council and include engagement of the community," the panel wrote.
George St resident Nigel Puckeridge said neighbours were relieved.
"This is an example of community banding together and standing up for what they believe in," he said.
"Wollongong council should be accountable for wasting people's time by not getting it right in the first place.
"It is a great result and hopefully sets a precedent for the area."