Residents close to the proposed development at the corner of Park Street and Murray Road received letters from City of Swan last week calling for submissions on the rehabilitation centre.
The proponent's application had listed the proposal as a community use, which is discretionary in a rural residential area, but this was rejected.
After a flurry of calls, council delegated first to the chief executive and then to planning staff the capacity to refuse such uses given that there was no discretion involved.
Get in front of tomorrow's news for FREE
Journalism for the curious Australian across politics, business, culture and opinion.
READ NOWThe Advocate received several calls from residents who said the development was not in keeping with the rural residential zoning of the area.
Some nearby residents feared their safety would be put at risk if the centre went ahead.
Shalom House proponent Peter Lyndon-James said he was trying to work out the best way forward following the rejection of his application.
The Shalom House website describes the organisation as a men's residential Rehabilitation Centre located in the heart of the Swan Valley.
The application form for Shalom House shows men who go there agree to work unpaid, Monday to Friday, for the first 12 weeks of their stay.
Following that, they can then start two days a week of paid work with an associated employer and eventually leave the program.
The City of Swan has not yet ascertained whether a rehabilitation facility is currently operating from the Henley Brook property.
Acting chief executive Steven Tan would not comment on where a more appropriate location for the facility would be.