Michael Heali-Rae was denied the planning of apartments in a free public house in Tralee.
TD, represented by Co Kerri, is already the largest owner of Dail with up to 10 properties for rent.
His proposal to reorganize Nancy Miles Pub's work, opposite the old head of the Munster Fusiliers Army in Tralee, met with a strong local opposition.
The original application was to change the use of most of the ground floor and extensions to Nancy Miles Public House to nine residential units.
After the revised registration, the Kerry County Council issued a permit for four apartments.
However, more than a dozen residents of Ballimullen and surrounding areas filed complaints and observations on plans.
The nearby residents said that rehabilitation would hurt their benefits and devalue their properties.
However, Mr. Heali-Rae, through his agents, said that the target market is professional people working in a nearby hospital, and the renovation of empty property would increase the area.
Inspector Board Pleasant Kevin Moore, who visited the site, said that although zoning was residential, "there are serious concerns about the nature and extent of development for this site."
The Council's license was for four apartments in the attic of a public building on the ground floor.
"This means that a public house at the ground floor level will immediately stand in front of the apartment one and two to remain a public house.
"This development will provide an insufficient form of accommodation for tenants of the proposed apartments and will likely have serious adverse consequences for the functioning of the rest of the building in terms of meeting the basic standards for tenants and the needs of the public house, Mr. Moore concluded.
The committee decided in accordance with its inspector and refused the development permit.