A proposal for a block of council flats at the Elephant & Castle to join a Bermondsey-based tenant management organisation has been rejected in a ballot of tenants and leaseholders.
Of 70 council tenants eligible to vote, 54 took part in the ballot. 24 voted in favour of the proposal to join the JMB, with 30 against.
49 of the 59 eligible leaseholders participate in the ballot, with 46 votes in favour of the JMB proposal and three votes against.
As the proposal required the support of a majority of affected tenants, the overall result is a 'no' vote.
"I know there have been strong feelings on both sides of the argument and that many residents will be disappointed with the result," said Cllr Stephanie Cryan, cabinet member for housing.
"However, under statutory guidance, the ballot required both an overall majority and a majority of secure tenants to succeed, and in this case the majority of secure tenants voted against the proposal."
Leathermarket JMB is the first self-financing tenant management organisation in Southwark and has won acclaim for achieving higher satisfaction levels than services directly run by the council.