The owners of an empty lot in Chinatown are heading back to the drawing board after Vancouver city council voted down their rezoning proposal. 

Beedie Living, a development company, purchased the plot at 105 Keefer Street from the city four years ago and wanted to build a 12-storey mixed-use property, a plan that caused deep divisions in the community.

On Tuesday, councillors voted 7-3 against the proposal, causing cheers in City Hall from some of the project's opponents.

"We think it's unfortunate, we think it's perhaps a loss for Chinatown, but nevertheless we respect it," said Houtan Rafii, vice-president of residential development at Beedie.

Mayor Gregor Robertson said even though the developer put years of work into the project, and collaborated with the city in an effort to address community concerns, the opposition was ultimately too widespread to ignore.

Robertson said the redevelopment plans inspired a "passionate, emotional response" unlike any he's seen during his nine years as mayor.

"Council heard overwhelming opposition from several generations of Vancouver residents on the rezoning for 105 Keefer, and concern about how to manage Chinatown’s pace of change," Robertson said in a statement after the vote.

"I clearly heard anxiety but also excitement for new opportunities for Chinatown’s future – a neighbourhood in transition today. Like all neighbourhoods, Chinatown will continue to change and evolve, and the public debate and dialogue will continue."

The development was to have 106 market price homes, 25 social housing units, communal space for non-profits and cultural space for seniors. Given the housing crisis in the city and lack of affordable options for many long-time residents, critics argued the project simply didn't offer enough to justify its place in the neighbourhood.

"[We're] beyond thrilled to have this victory for the community, to see more social housing 100 percent and a truly affordable and accessible community space," said Sophie Fung of the Chinatown Action Group.

Fung's group said they would like to see Vancouver purchase the property back and construct dedicated social housing on the lot.