To create a project area of any type, the user needs to be in JazzAdmins or JazzProjectAdmins group. You can check your application groups mapping and remove users from those groups to achieve what you mentioned.
Amitabha Nath selected this answer as the correct answer
Dashboards and work items are no longer publicly available, so some links may be invalid. We now provide similar information through other means.
Learn more here.
