The Diocese of Sandhurst has lodged plans for the Aspinall Street site, which is covered in bushland.

Under the plan, the homes would be built near Alder Street and the top half of the site kept as a public nature reserve.

Residents in Keast Street said they feared the development would create further traffic issues and destroy native habitat.

The previous federal government pledged money to fix the intersection of Alder and Aspinall streets with a roundabout and lighting under a black spot program.

Patrick Bannan said additional homes would create further issues.

“It’s already dangerous,” he said.

“It’s a really bad intersection.

“And with the bushland, once it’s gone it’s gone.

“It’s a pristine piece of Box Ironbark bush.”

Debbie Bannan said it would “ruin the aspect of the area”.

Glen, who declined to give his last name, said he also opposed the plans.

“I’m against it,” he said.

“They should leave it as is.

“It would be nice if they stopped cutting up land and putting houses on it.”

Norma Young said the project would be positive but said she had concerns for native wildlife.

“Having a lot of homes could upset the birdlife and kangaroos,” she said.

Sam, who asked for only his first name to be used, said he was concerned about noise and traffic.

“It’s a 50kmh zone which a lot of people don’t realise,” he said.

“People fly up and down Alder and Aspinall streets.

“But in terms of environmental impact it’s not something that worries me too much, that’s just what happens in Bendigo.”

Glenda Lewis said she was concerned the properties would be housing commission homes.

“I like looking out onto the timber and I’m a bit gobsmacked really,” she said.

“If it’s housing commissions homes, I’m out of here.

“It reduces the value of your home, despite what they say.”

Diocese of Sandhurst business manager Cameron Fraser said the church had addressed issues with a 2010 plan which was contested at the Victorian Civil and Administrative Tribunal.

“We believe the proposed development is sensitive to the concerns raised (in 2010),” he said.

“It will provide sorely-needed new housing stock in Bendigo, only five kilometres from the CBD.

The church has owned the site, which includes the Bishop of Sandhurst's residence, since 1888.