Seven Richmond Street residents spoke against the multiple-dwelling development during public question time at the City of Vincent's council meeting last Tuesday.
The council refused the application, which the developer had been working on with the City for 12 months.
Mayor John Carey said he expected the developer to take the application to the State Administrative Tribunal.
Get in front of tomorrow's news for FREE
Journalism for the curious Australian across politics, business, culture and opinion.
READ NOW"We had an emergency meeting with residents last week," Mr Carey said.
�This is compliant at three storeys based on our current policy but in six months it won't be; we are playing catch-up at the moment with planning.
"Front setbacks are the strongest issue and the reason I won't be supporting it."
Residents said Richmond Street was too narrow to accommodate the extra traffic from the development and some residents said a three-storey development was not in keeping with the area.
Amanda Bruce said 56 per cent of the developer's application required attention because it did not comply with planning codes.
"The setbacks are significantly out of code," she said. "This report is at odds with the design codes."
Councillor Joshua Topelberg did not support the application.
"The impact of the front setbacks changes the nature of the street," he said.