Councillors have rejected proposals for 64 new houses on Honeyholes Lane in Dunholme.
The decision was made at a West Lindsey District Council planning committee meeting on May 31 after plans were submitted on February 2.
This was the second amendment of the proposal by Cyden Homes Ltd after they increased the number of proposed housing by 33%, which was cited by councillors as a reason to reject the development.
A number of councillors raised the issue that many four bedroom detached houses were not deemed affordable and all the affordable housing was to be located all together.
Councillor Owen Bierley said: “We have nobody from the developer to explain what the benefits are.
“All of the affordable homes are all gathered together in one part of the development, which isn’t what we prefer to see.”
The governors of Dunholme St Chad’s CofE primary school raised concerns that there would be capacity issues with the school if the plans were approved.