A plan by the Otago Racing Club to subdivide part of Dunedin's Wingatui racecourse for housing has been refused resource consent.
The proposal for 11 housing sections on the section of rural-zoned land near Mosgiel was opposed by many residents, who said the rural zone which should guarantee a rural outlook.
The Dunedin City Council panel, which held the consent hearing, has agreed.
It says new houses would hurt the area's semi-rural character, undermine the district plan and set a bad precedent.
The Otago Racing Club says it will study the decision before deciding whether to lodge an appeal.
Club president Dean Lawrence said the decision was not a disaster, but disappointing for the Club's future prosperity.
He said plans to build a training centre of excellence may be held back.
"We'll just have to sit back and have a re-think. I believe our strategic plan still is something we should aspire to, we'll just have to see what our options are."