Housing association plans to replace windows and improve insulation at 34 homes in Aberyswtyth have been dropped after a campaign by leaseholders.
Housing association Tai Ceredigion said the money allocated for Brynrheidol estate could now be spent on residents in nearby Pontrhydfendigaid.
Twelve leaseholders complained their homes did not need the work, which they claimed would cost them about £50,000.
But Tai Ceredigion said 22 of its tenants on the estate would lose out.
Tai Ceredigion is now seeking permission from the Welsh Assembly Government to switch the ARBED energy efficiency grant funding it has received to another project in Pontrhydfendigaid.
The housing association said the money would have been spent improving the living conditions of its tenants and leaseholders, as well as the appearance of the estate.
It said that Brynrheidol tenants on ground floor flats, located underneath leaseholders' maisonettes, would now have to "put up with damp and condensation problems for longer".
The work is being rescheduled for a later date.
Tai Ceredigion's chief executive, Steve Jones said: "This is a very unfortunate decision but, due to the unwillingness of some affected leaseholders on the Brynrheidol estate, we have had to postpone the improvements project.
"Ironically this is a missed opportunity for the leaseholders who could have seen added value to their properties at a reduced cost.
"We will still need to tackle rubble filled cavity walls and patchy cavity insulation within the next four years, but there is no guarantee that future grant funding will be available. So potentially, it could cost leaseholders more eventually."
Ken James of Brynrheidol Leaseholders' Association said Tai Ceredigion was wrong to force leaseholders to spend the money.
"Some of our windows can only have been in for just over a year. They were having to be replaced because Tai Ceredigion wanted to put cladding on the outside of our homes and the windows wouldn't fit," he said.
"We estimated that the work would have cost us as leaseholders about £50,000 each. We don't need this work. We already have cavity wall insulation."
Mr James said the leaseholders had complained to Ceredigion's AM Elin Jones, its MP Mark Williams and Mid and West Wales AM Nick Bourne.
"Tai Ceredigion says the tenants' flat are condensated, but that is just one wall in the bathrooms, which could be solved without the leaseholders spending thousands of pounds," he added.