Leeds City Council blocked plans to turn the vacant Newall Church Hall site in Otley into six homes.
Councillors cited the loss of green space and impact on a heritage asset when they rejected the scheme in October 2024.
The applicant, B Houldsworth and Sons, then lodged an appeal with the Planning Inspectorate, which ruled against the council.
It meant plans could go ahead to convert the building, which dates back to the 1920s, into two homes, and build another four detached houses at the site.
The inspector’s decision, first issued last September, was reported to a meeting of the council’s South and West plans panel on Thursday (January 29).
In a letter to the council, a planning inspector said: “The proposal would provide six new well-designed dwellings within an existing residential area, contributing to local housing supply and the local economy.”
The council’s original refusal decision went against the advice of its own planning officers, who recommended approval.
At the time, councillors decided the project was not in line with the city’s planning policies.
But the inspector said any conflict with council policy was outweighed by the benefits of the scheme.
The building firm also lodged a claim for costs, citing “unreasonable procedural behaviour” in the council’s decision making.
But that part of the appeal was rejected by the inspector, who said the council had justified its reasons.
They said: “The planning committee is not duty bound to follow the advice of its professional officers.
“However, it must substantiate the grounds for its decision.
“Although there is disagreement amongst the parties, I am satisfied that the council has not acted unreasonably regarding the substantive matters of the appeal.”
Notes: Appeal decision issued September 9, 2025. Report presented to plans panel January 29.