Deputy leader of the authority, Councillor Graham Marsh, had previously objected to the proposal and described it as “unacceptable”.
Site layout for 200 homes at Tothby Lane, Alford.
He said the development did not comply with the emerging plan, and was not sustainable.
But, Samuel Lake, who spoke on behalf of St Andrews, said the proposal made for an “extraordinary opportunity” to create a “sustainable community”.
“The proposals will deliver a number of significant benefits to the local area and the wider district,” he said.
Under the plans, 10 one bedroom, 40 two bedroom, 80 three bedroom and 70 four bedroom homes would have been built.
ELDC Deputy Leader Councillor Graham Marsh.
However, Councillor Marsh said he had “not had one person express support for this application”.
“I have great fears there will be a serious accident, if not a fatality because of the volume of traffic and the risks taken by people crossing the road in this area,” he said.
East Lindsey District Council said in a decision report: “The proposed development would, by virtue of its scale, visually and prominently intrude into an area of established open countryside resulting in an unacceptably adverse impact on the character and appearance of the area.”
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