The application, for the Whittington Road Sawmills site in Oswestry, had also sparked road safety concerns from residents who said the road had already seen a string of accidents and near-misses due to the number of parked cars.
The outline plans were lodged with the council last year, initially for seven houses and a block of three flats.
The total number of properties was revised down to eight, with the exact layout to be decided at a later stage, after planners said the initial proposals would result in over-development of the site.
Several Whittington Road residents attended a virtual Oswestry Town Council planning committee meeting in November last year to voice their concerns.
They said the proposed single parking space per property was not sufficient and would see more cars parking on the road, closer to the railway bridge, reducing visibility and hindering emergency vehicles.
The town council objected to the application, saying: “This and future planned developments would lead to the over-development of the area, exacerbating the existing highway and parking issues in the immediate location.
“Additional traffic, increased on-road parking and the design of the entrance/exit onto the highway would pose a significant risk to the safety of local residents.”
Deputy mayor Jay Moore, who lives near the site, also lodged his own objection.
He said: “Crossing the road between the parked cars is already dangerous.
“Many of the residents have young children and we all have stories of near-misses, and only last year a gentlemen was actually struck by a vehicle whilst crossing.
“I believe that should this development go ahead, then traffic calming measures must be implemented on Whittington Road and the new properties need sufficient parking space for at least two vehicles per household.
“Any additional parking on the currently developed side will result in vehicles needing to park closer and closer to the bridge which only reduces visibility further and increases the hazards of the already busy road.”
Despite the concerns of residents, the council’s highways department did not object to the application.
There was however an objection from regulatory services officers, on the basis that the applicant’s noise assessment “concludes that the noise levels from the industrial site to the south is likely to have a significant adverse impact on the proposed development”.
Officers also voiced concern over whether the noise assessment was “robust enough”.
A report by planning officer Melanie Williams, refusing planning permission for the scheme, said: “The impact of the noise could be mitigated by various measures detailed in the report but the recommended internal noise standards could only be achieved with an acoustic glazing scheme.
“This means acceptable internal noise levels could only be achieved with the windows kept shut - this is generally accepted to have a detrimental impact on the quality of life of the future occupants.
“This site is very small and has sources of noise on two sides (the road will also be a source of noise that needs to be considered) which means the ability to change the design or layout to mitigate the noise is very limited.
“Further to this it is felt that the site is not suitable for residential development and the proposals submitted do not adequately protect the quality of life of the future occupants or the neighbouring business.
“In addition it is felt that the measures to mitigate any impact on future owners would adversely limit the development and may not be realistically achievable.”