Pembrokeshire County Councillors have backed a notice of motion to turn the former Tenby Cottage Hospital site into affordable housing for local people.
The motion was proposed by one of the town's two representatives, Clr. Michael Williams, at last Thursday's full council meeting.
Fellow resort member, Clr. Mike Evans, supported the notice of motion, but urged for an amendment asking that the council, which owns the site in Trafalgar Road, investigate the possibility of developing it for affordable homes for locals, possibly as a joint venture with housing associations and/or the private sector, but that a comprehensive study be undertaken both to maximise capital receipts and to identify appropriate opportunities for afforable housing."
Speaking after the meeting, Clr. Williams said: "My major concern is that we do something positive to help in particular the local young people of Tenby to secure a home.
"Unless this site is designated by the county council for this specific purpose, we will see it being sold to a property developer whose main concern will be to maximise their profits."
Clr. Williams continued: "In my opinion, we have seen too much of this already in the town. This is unacceptable when one looks at the history of the site. The old hospital was paid for by the people of Tenby following the Dyster initiative.
"I am looking for some leadership from the county council in particular on this site which will offer some protection to what remains of the local community of Tenby. Make no mistake, our community is in crisis. Without the local young people, the very fabric of what we have always taken for granted is threatened," he added.