A PLANNING inspector who has dismissed Kebbell's plans to build a block of 18 flats at the Herne Farm Estate in Petersfield says the three storey development would cause an "unacceptable level of harm" to the area.
But in his report of a hearing held at the Festival Hall Rose Room Andrew Newman from the Planning Inspectorate said he did not rule out the possibility of development on the site.
The proposal to build the flats at the junction of Marden Way and Moggs Mead was welcomed by Petersfield town councillors, but turned down by East Hampshire District Council planning officers.
Former town mayor John Holt said the plans could "spoil" the look of the area.
EHDC planning officer Julia Mansi said the building would have an adverse effect on neighbouring residential properties and would "constitute an unacceptable form of development on the site."
Kebbell appealed against the decision and made its case with Hawthorne Kamm planning consultants at a hearing on April 3.
Mr Newman said: "The design and layout of the scheme in its relationship to its surrounding would in my opinion be poor and there would be an unacceptable level of harm to residential amenity."
But Mr Newman believes the Herne Farm site is a good location for residential development.
He said: "This site is within walking or cycling distance of shops, jobs and services in Petersfield.
"Foot and cycle routes to the town centre are planned to be improved and there is a bus service, albeit not a frequent one.
"Higher-density development can help to improve the viability of public transport and reduce dependence on the car.
"This approach would not conflict with policies for the protection of the Area of Outstanding Natural Beauty, bearing in mind the urban context of the site."
He added: "I also bear in mind that the best can be the enemy of the good, and that there may be more than one appropriate way of developing this site at higher density.
"All the time it remains vacant it is making no contribution to meeting housing needs.
"I certainly do not rule out the development of flats on at least part of this site, nor do I see any objection in principle to three-storey development when it is designed as such from the outset.
"Nevertheless I consider that the proposal would result in a poor relationship between buildings and open space, a lack of relationship with the character of adjoining housing areas and an ambiguity about public and private open space."