Dimensions Care had applied to change the house in Sheet Road, Ludlow, into a home-based environment for five children aged between six and 17 with social and emotional needs but it split the community between residents ready to welcome needy young people and those worried about a range of issues including loss of property values.
Shropshire Council planners rejected calls from local councillor Viv Parry to take the issue to the planning committee, deciding that it could be dealt with at officer level under delegated powers.
Council planners said: "In making a recommendation on this application regard has been taken of all the representations received in respect of the proposal.
"These matters include the potential devaluation of existing properties which is generally a matter which can be attributed little weight."
Objections to the plan also claimed there was a "lack of publicity and consultation" but the planners ruled that it had been publicised in line with the rules.
They decided that the principle of the development "is considered acceptable".
"The acceptability of the proposal on detailed amenity and highway grounds has been assessed as acceptable, subject to the planning conditions recommended," they said.
The operators will have to present a noise management plan to the council for approval.
Reaction from locals had been mixed, with some saying they don't want the potential for trouble in the neighbourhood and others offering to welcome the children to the town.
Dimensions Care has told Shropshire Council planners that it is looking to "care for children who have suffered trauma in their past". They will have a trained staff team adopting a therapeutic approach and provide a family home structure with routines for all the children.
The company says it has written to all the neighbours offering to talk about what it does.
One resident complains that it is "not a suitable use for the neighbourhood".
"A child to staff ratio of 1:1 suggests the most serious behavioural needs and with up to five children I am worried that there will be an excessive amount of nuisance behaviour and noise.
"This does not sound like living next door to a family nor would it fit in with the keeping of the community."
Other objectors are worried about increasing traffic on a busy road during staff changeovers.
But one supporter said: "We strongly oppose and are appalled by the deeply offensive objecting comments of negative prejudice and misconception, projecting harmful and malicious stereotyping of children in care.
"The deplorable, scaremongering remarks aimed against vulnerable children with social and behavioural needs who have suffered trauma are a stark, unsettling reminder that discrimination is a constant challenge faced by vulnerable people in society every day, which is extremely distressing."
Another supporter said: "Most of the people in Ludlow will welcome these children into our community. I, for one, will be the first person to knock on their door with freshly cooked cakes to welcome them all!"
Another said: "Life is tough for so many young people and they benefit greatly from this type of care, particularly amongst a community where they can develop the skills and social relationships required for a happy and healthy adulthood.
"Please allow them to become worthy members of this community."
Local councillor Viv Parry has reflected the views of local objectors in her comments.
She has told planners: "Overall most people feel that this property is not right in this area and should be in open countryside where they can run around in the sunshine."