The city council of Torsby, a town in Värmland, western Sweden, planned to use an old vicarage as housing for six refugees children.
However, all eleven nearby residents protested the decision. Now the city must find another solution.
"I am surprised and disappointed," local commissioner Ann-Katrin Järåsen told Sveriges Radio (SR) on Wednesday.
"I thought we were more welcoming than that."
The residents in the area expressed concern that the value of their own houses would decrease, and that the calm, peaceful atmosphere of the area would be disturbed.