Building permit not granted - Channel overloaded

What speaks against the construction of a small sewage treatment plant?

I'll rephrase your question (for the building authority): "what speaks against the granting of the building permit under this additional condition?" (of course, you must not ask them that directly, otherwise they might come up with an "answer" to it, instead the way must (tomorrow!) lead to a lawyer to challenge the rejection of the building application. Moreover, I recommend in such cases to also put pressure on the town hall through one of the troublemaker factions that are represented in almost every municipal council. First to publicly call for readiness for additional development, but not to do your homework beforehand (checking the sewer capacity), that is really quite something. "Politics" must also know what it wants :-(

We even had to sell a part of the end of the property to the city if we want to build in the back, because a road is possibly going to be built on the back side in a few years.

Will a new sewer also be laid under the new road? Until then, a wastewater tank would still be "tolerable," but permanently that would be tough.

What is not entirely clear to me upon reconsideration is... the problem is, as with every combined sewer system, the rainwater. If you infiltrate the water completely on your property, then the additional load on the sewer system is negligible. What exactly is supposed to overload the sewer now? In case of doubt, I would start with the lawyer and not even bring up topics like small sewage treatment plants and wastewater tanks.

We had that too. We then went the route of a building encumbrance over another property and were connected to a different street. It just cost money. We had to lay the sewer through the entire garden and the neighbor's garden. It worked because it was the parents. If the sewer in front of the house is ever done, we will connect to the one directly in front of the house.

What is not quite clear to me after thinking about it again... the problem is, as with every combined sewer system, the rainwater. If you infiltrate the water completely on your property, then the additional load on the sewer system is negligible. What exactly should overload the sewer now? If in doubt, I would start with a lawyer and not even bring up topics like small sewage treatment plants and wastewater tanks.

I guess the problem was the dozens of times people turned a blind eye before it just became impossible... the OP wrote that the sewer is already backing up and there was a recent assessment of the situation that apparently prevents the discharge of additional wastewater.

I guess the problem was the previously repeatedly closed eyes until it simply no longer works ... the OP wrote that the channel is already backing up and there was a recent assessment of the situation that apparently prevents the discharge of further wastewater.

But as I said, in a combined sewer system wastewater is never the problem. During heavy rain, completely different magnitudes come together than when everyone flushes the toilet at halftime simultaneously. Accordingly, only the discharge of rainwater can be refused according to common sense (which is not always on board with lawyers and bureaucrats).