Catherine Zeta Jones and her parents have failed to stop a small business next to their new home at Mumbles in south Wales.
The Hollywood couple have taken legal action to protect their privacy
The Hollywood superstar and seven other local objectors wanted the small telecommunications business run by her neighbour to be kicked off the estate.
A solicitor acting for CZ Investments - the actor's company - and her parents Dai and Pat Jones had claimed Mr Gwynn's business would infringe their privacy in the small development that will be protected by security gates.
But Swansea councillors backed Steve Gwynn's claims that star gazers and paparazzi seeking out the star on her visits home to Wales would create far more of an intrusion than his business.
Acting against their own officers' recommendation, councillors on Swansea's development control committee voted overwhelmingly to allow Mr Gwynn, the builder of the three-home estate who has been running his telecoms business in a barn next to his house, to continue trading.
In letters to the authority, Mr Gwynn's business associate Vivian Jenkins said, on average, seven parties of celebrity spotters were having to be moved off the private site every day.
At Tuesday's meeting Councillor Des Thomas said: "I'm sure if the objectors wanted isolated security they should have looked elsewhere."
And Councillor Keith Marsh said: "The majority of traffic generated there is not of the applicants doing. They have come to see if Mr and Mrs Douglas are in residence."
Neither Catherine Zeta Jones' parents Dai and Pat or any of the other objectors were present at the meeting.
Because councillors voted against their officers' recommendation the decision will still have to be rubber-stamped by full council.
One of the houses on the estate can be seen from the road
The decision will also be subject to review after two years of monitoring.
After the meeting Mr Gwynn said: "It means that we can continue to work and three jobs are safe for the next two years. Common sense has prevailed."
The house being built for Zeta Jones' family is nearing completion and last month her parents put their own family home in Mayals on the market with an asking price of £425,000.
Mr and Mrs Jones are to move in while the Hollywood couple will occupy an upper floor on their visits to Wales with children Dylan and Carys.
The Swansea-born actress and husband Michael Douglas are known to jealously guard their privacy and sued Hello! magazine over unauthorised photos of their wedding in a much-publicised legal battle.