Residents have urged the government to reject an appeal to build 23 homes in Bishop Monkton.
Kebbell Development Ltd tabled a plan to build the houses on Knaresborough Road in the village.
At a meeting of the Skipon and Ripon area constituency planning committee in August,
councillors rejected the plan amid concern it would increase the amount of raw sewage released on streets.
The decision went against North Yorkshire Council officers’ recommendations to approve the scheme.
As a result, the developer has appealed the decision to the government’s Planning Inspectorate, which deals with planning disputes.
In a statement of case submitted to the inspector, Kebbell Development Ltd argued that there was no planning reason for the scheme to be refused.
However, Bishop Monkton Action Group has urged the government to throw out the appeal.
In a 26-page letter of objection submitted to the Planning Inspectorate, the campaign group said the scheme would “threaten the sustainability of our village”.
The group said it had concerns over the impact on drainage and sewage, as well as a “historic lack of investment” in the area’s sewer system.
“We have highlighted the key issues within the scheme as submitted by the applicant that threaten the sustainability of our village.
“However, the historic lack of investment in our sewer infrastructure is already threatening the sustainability of our village.
“This is evidenced in raw sewage discharge on our streets, in people’s drives and gardens plus sewage discharges onto our Beck and the Ure in a Drinking water safeguard zone. Please do not make this any worse for us.”
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The move comes as councillors rejected the proposals at a council meeting three months ago.
One councillor said having more properties in the village could exacerbate the “abomination” of raw sewage being released into the streets during heavy rainfall.
The committee had also called for Yorkshire Water to provide more detail on how the scheme would impact on foul water drainage in the village.
No representative from the company appeared at the meeting.
But the company said “most, if not all” of the “sewage escapes” in the village were caused by residents putting excessive toilet paper, fat, oil and grease down toilets and sinks which caused pipes to block.
A government planning inspector will make a decision on the appeal at a later date.