The proposal to build 24 entry-level homes on farmland next to the vacant Lion Inn, in Edgmond, near Newport, received more than 160 objections at Telford & Wrekin Council.
The application by Green Square Accord was recommended to be granted by officers at the Council but had been "called-in" by Edgmond Parish Council who asked that the issue be decided by elected committee members rather than be delegated to officials.
Objecting to the development, Allan Wilson, Chair of Edgmond Parish Council, told Telford & Wrekin's Planning Committee on Wednesday night the figures used by Telford & Wrekin to ascertain affordable housing need in the area were "conflated", which meant the development was not needed.
He said: "The evidence of affordable housing is getting conflated by the current Census 2021 when the number of young people in the parish were actually confused by people attending our universities, in short, conflating these figures. In fact, the actual need as found in the last survey was 11 affordable houses in the area."
He added that the design was also not suitable for the rural location.
"The design density is not in keeping with the local street-scape and look like a cut and paste from an urban environment put into a rural setting. These are urban housing units being shipped into a rural landscape," he said.
But Mike Nolan, head of development at Green Square Accord, said the plans would give opportunities to people unable to afford homes in the area.
He told the committee: "The proposals will provide an affordable pathway for citizens in the borough that would otherwise be locked out of the marketplace."
He said the scheme would include into six shared homes and 18 affordable rental homes to meet a need for "entry-level affordable homes" in the area.
Council officer, Robin Jones, informed the committee that the concept of "entry-level affordable homes" was introduced in the National Policy Framework in 2018 and differed to the affordable housing needs identified in the both the Local and Neighbourhood plans, which pre-dated the framework.
She added that the proposals met a "borough wide need" for entry-level homes and that the target for affordable homes in the Local Plan was anyway "not a maximum".
The Committee also discussed concerns that the development would impact a local heritage site.
The land for the homes is next to The Priory - a five bedroomed, Grade II Listed cottage, and the committee was told that while the development would have a "negative impact" on The Priory by restricting its views, the "benefits of the proposals outweigh the harm to the heritage asset".
Councillors voted by four votes to two, with two abstentions, to grant planning permission for the development.
An access road to serve the housing estate planned for part of the car park of the Lion Inn pub opposite was also approved at the same meeting.
The pub is a protected Asset of Community Value, which means it has to stay as a public house for community use for the next five years, although it is currently vacant and closed.