The Northern Midlands Council rejected an application proposing seasonal workers accommodation at Cressy as it only offered two on-site car parks for 72 people.
The application proposed visitor accommodation at 72 Main Street and wanted to build five buildings to provide 60 beds, two shower blocks, two toilet blocks and add 12 beds to an existing dwelling.
The council rejected the application at its meeting on Monday night citing the number of car parks proposed as problematic and will develop a policy regarding visitor accommodation.
Councillor Ian Goninon said he did not think there was sufficient parking on site and who was to say the people using the accommodation in future would be seasonal workers who did not own cars.
Council's senior planner Paul Godier said for the number of people 18 car parks were required.
"The application describes the accommodation as being for 'pickers' who will be bussed to their work," he said.
Rustic Bakery owner Katie Lamprey said her main concern was parking as the available spaces on Main Street had already had an affect on her business.
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She said despite the assumption seasonal workers bussed to work, she had seen them with vehicles parked on the side of the road for extended periods of time.
A Burlington Berries representative said despite speaking out about the need for further accommodation they had four key concerns with the development.
Including its use of short or medium term stays which may not accommodate workers for the required nine months, the noise levels, welfare of having so many people in the space and the parking available.
Councillor Jan Davis raised the point a policy was needed to address visitor accommodation best practice and Councillor Andrew Calvert agreed.
"We need to be putting some pressure on getting some decent planning around this whole issue," he said.
"The whole state has been caught with its pants down on this issue, it needs urgent attention."