The Alberta Court of Appeal has overuled the City of Edmonton in a dispute with an inner-city neighbourhood over a housing project for people with chronic addictions.

The court found that the development permit for the 42-suite Ambrose Place was not valid.

That means construction, now nearing completion, should stop immediately, said Rob Stack, McCauley Community League president.

Coun. Jane Batty said the city may have to buy the building and have Ambrose Place built elsewhere.

The project could be turned into affordable housing for families, she said Tuesday.

"To be able to bring young families in and make it affordable would be great," she said.

Stack said that would send an important message to other agencies looking to locate social housing in the community.

"If what you're looking for is the path of least resistance, it's not us anymore," he said.

Ambrose Place is the third social housing project the community has taken to court.

McCauley Community League believes the concentration of supportive housing projects in the neighbourhood is the result of irresponsible planning by the city.

Appeal court chastizes city

The appeal court ruling also chastized the city for not giving the McCauley Community League proper notice of the project.

"It is worth noting how unhelpful it was for the development officer not to give notice of this development permit," the ruling stated.

"It was well known that this was a controversial development that was opposed by some people. Failing to give notice of development permits that are obviously controversial helps no one."

The community had argued Ambrose Place doesn't meet zoning requirements, because the facility is more of a care facility than an apartment building.