Plans to build 300 new homes in Filey "will be the death" of the resort, a councillor has claimed.
Scarborough council has approved plans for the £45m housing project off Muston Road by developer Coast & Country.
Independent councillor Sam Cross, who represents Filey on the borough council, said: "The infrastructure of the town can't cope with it."
But Coast & Country chief executive Iain Sim said new housing was needed to meet "pent-up demand" in the town.
The proposals include 180 properties for sale on the open market, and 120 affordable homes for rent and shared ownership in 39 different styles.
A key condition of planning approval for the Muston Road development is that it can be shown not to increase the flood risk to existing properties, which has concerned many local people.
The town was hit by devastating floods in 2002 and 2007.
Mr Cross said: "The development is far too much for Filey. Three hundred homes, an extra 1,000-plus people on top of a population of six and a bit thousand is just far too much.
"It is going to be the death of Filey, I'm absolutely gutted."
Mr Sim said Coast & Country had worked "very closely" with Scarborough Borough Council on the plans.
"Filey as a town is very popular," he said. "I think the demand will be very high.
"There is a pent-up latent demand for affordable housing and other housing within the town so we're actually extremely upbeat that it will be a very popular development."