A petition of 1,432 signatures campaigning against the loss of parking spaces in Luton's High Town ward has been rejected to allow the borough council to build family housing nearby.
The local authority-owned Foxhall Homes has planning permission for 23 private sale and nine affordable rent properties on the former Taylor Street car park.
The petitioners say the prosperity of the area is at risk if businesses and their customers are left to search for parking further away, and asked for the reinstatement of the Brunswick Street car park.
Alternative options of Hitchin Road and Wenlock Street car parks are within easy walking distance of High Town Road, according to a report to the borough council.
Lead petitioner and the High Town business and community association representative Mohammed Shahid told a full council meeting on March 22: "We've gathered more than 1,400 signatures in support.
"We tried to stop the legal process," he explained. "But a deed of variation was put in place by LBC. Why?
"Brunswick Street car park has been crucial for business owners and their customers during the past 16 years I've been working in High Town. The council's removal of 28 parking spaces has been without proper consultation.
"There's no parking for disabled people within the car park. Elderly people cannot walk such distances from the other car parks suggested by the council.
"Traders must park further away which is time-consuming and a deterrent. The needs of the leaseholders, the minority, should not outweigh the majority within the High Town community.
"A public car park is being given away by the representatives who are meant to serve the community."
Highways portfolio holder and Labour Limbury councillor Rob Roche replied: "Historic financial information shows that the car park was underused.
"LBC faced the decision of keeping such a car park or enabling the development of badly needed quality homes.
"The council is grateful to the High Town businesses which gave up their rights to parking spaces in Taylor Street to enable this development to happen.
"We know Luton faces a shortage of good quality family homes, particularly those that are affordable. Some would call it an emergency. This development helps meet that need while supporting the regeneration of High Town.
"The petitioners ask for alternative parking to be made available. There are alternatives in Hitchin Road and Wenlock Street, a short distance away."
Liberal Democrat Barnfield councillor David Franks described the handling of an amendment proposed by councillor Roche as "a shambles".
But he offered his group's support because providing an extra ten spaces locally offered "some compensation for the loss of Brunswick Street parking spaces".
Liberal Democrat Stopsley councillor David Wynn added a second amendment demanding "urgent action to make the alternative car parks in Hitchin Road and Wenlock Street attractive and safe to use”, which was also agreed.
"They're neither attractive or safe at the moment and the activities after dark at those alternative locations are very unsatisfactory," he warned.
Labour High Town councillor Umme Ali referred to a conversation with a business owner who mentioned that "one of her customers went to Wenlock Street car park and she was attacked".
She hopes the amendments would help and everyone can now work together, saying: "I've seen some of the papers here around crime statistics, so we need to make these car parks safer to use."