Michael Healy-Rae was refused planning flats in an empty public house in Tralee.
TD, which represents Co Kerry, is already the largest owner of Dáil, with up to 10 leased properties.
His proposal for the conversion of part of the Nancy Myles Pub, opposite the former Army headquarters of the Munster Fusiliers in Tralee, met with strong local opposition.
The original application was for use change of most of the ground floor and extension to the Nancy Myles, public house for nine residential units.
Following a revised request, permission for four apartments was given by the County Council of Kerry.
However, more than a dozen residents of Ballymullen and surrounding areas provided resources and observations on the plans.
Nearby residents said that redevelopment would hurt their facilities and devalue their properties.
However, Mr. Healy-Rae through his agents said that the target market was professional people working in the nearby hospital and renovating the vacant property would improve the area.
Bord Pleanála inspector Kevin Moore, who visited the site, said that although the zoning is residential, "there are serious concerns about the nature and extent of development of this site."
The council's permission was four apartments at the rear of the public house on the ground floor.
"This means that the public house at ground level immediately ahead of apartments one and two is to remain a public house.
"This development will provide a precarious form of accommodation for the occupants 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 residents and the needs of a public house," Mr. Moore concluded.
The council decided according to its inspector and refused permission for development.