A planning application for nine family homes on Alice Street off Tower Bridge Road was refused this week.
When Southwark Council granted planning permission in 2006 for the Richard Rogers-designed Neo Bankside scheme of 299 homes next to Tate Modern it allowed developer GC Bankside to provide the associated affordable housing off-site at other locations around Borough, Bankside, Bermondsey and Walworth.
One of the sites identified for social housing is the former Alice Street car park close to the Jam Factory.
This week Southwark's planning committee voted 4-3 to refuse a planning application for nine four and five bedroom houses on the grounds that insufficient amenity space was provided for future residents and because of the proximity of the proposed homes to the back of the Tower Bridge Road buildings.
Planning officer Bridin O'Connor told members that the applicant had "achieved quite a good development on a constrained site".
Patricia Byrne, representing the owners of properties on Tower Bridge Road, described the scheme as "gross overdevelopment" that would compromise the possible future development of the parade of shops.
Cllr Jeff Hook said that he understood the need for large family homes but queried whether this was an appropriate site.
Councillors also deferred a decision on another planning application for a Neo Bankside affordable housing scheme in Walworth's Lorrimore Road.
Together those four sites will meet 53 per cent of the requirement for affordable housing in relation to Neo Bankside.
The officers' report to the planning committee suggests that another site in Borough & Bankside is currently being pursued by GC Bankside to meet the rest of the requirement.
• A separate application by Galliard Homes for three new homes at the corner of Alice Street and Green Walk was approved by Borough & Bankside Community Council on Thursday night. A year ago local residents cleared 55 bags of rubbish from that piece of land.