The Property Council has criticised planning authorities for knocking back a nine-storey apartment building close to Broadmeadow train station, saying it sends the wrong message to developers in the middle of a housing crisis.
The Newcastle Herald reported on Tuesday that the Hunter Central Coast Regional Planning Panel had rejected the redevelopment of the landmark Premier Hotel at Broadmeadow because it was out of scale with the neighbourhood.
The development application by owner Thomas Hotels group exceeded the height limit for the site by almost 200 per cent.
But Property Council Hunter director Anita Hugo said Broadmeadow was a "perfect example" of the Minns government's strategy to boost housing density around train stations.
"We understand processes are there for a reason, but we need to not lose sight of the future while doing this or we will never see changes to the housing crisis we are experiencing," she said.
"The government's Transit Oriented Development Program is all about providing uplift in areas close to stations, and Broadmeadow is a perfect example of this."
Sydney-based Thomas Hotels wanted to demolish the Premier and replace it with a 30-metre building with 48 apartments, a new-look ground-floor pub and 16 hotel rooms.
City of Newcastle recommended refusing the $34 million development because of its height and mass.
The HCCRPP said the development application was "premature" given the site would be included in a planning strategy for the identified Broadmeadow Regionally Significant Growth Area.
"Significant variations to an adopted policy framework on a piecemeal basis undermines both existing controls and predetermines a structured strategic planning exercise which seeks to plan for change," the panel said in its ruling.
The council and NSW government are developing a Broadmeadow "place strategy" which will include the proposed Hunter Park sport, leisure and residential precinct and nearby private and public land deemed suitable for housing.
Ms Hugo said planning authorities should not reject developments such as the Premier Hotel while the new strategy was being developed.
"We should be cautious not to send a negative signal to the market and to developers who are willing to be a part of the housing solution," she said.
"We should be getting on with the job of accelerating housing supply and the strategy for this precinct, including Hunter Park."
