The Anglican Church wants to develop land at Campbell Town for social and affordable housing.
Midlands Anglican parish administrator Fiona Oates, said it was hoped to build 30 or 40 units on about 10 acres of church-owned land behind St Luke's Church.
"The land has been vacant for nearly 200 years - it is zoned for general residential purposes and is easily accessible to health services, schools, shopping and transport," Ms Oates said.
"We want to provide safe and secure accommodation for young people, families and the elderly.
"We would have a mixed development with 30 per cent privately owned, 30 per cent for the elderly and 40 per cent offering low rents with hopefully some emergency housing too."
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Ms Oates, an architect and wife of the rector Reverend Ian Oates, said there was a shortage of houses to buy or rent at Campbell Town and the housing plan would bring people of all ages together.
She also believes the housing development is vital for the future of the church and the township.
"Rural communities are shrinking and disappearing and personally, I think Campbell Town is at a critical point in its development and needs to grow or it will be in danger of being by-passed and disappearing," Ms Oates said.
It was vital, she said, to provide a mix of private and public housing. "As an architect I am passionately concerned about the built environment and want the young and elderly to have access to secure and safe accommodation," she said.
"I come from Britain where there has been a policy of building mixed developments for many years which have been very successful and avoided the potential stigma of having just one type of housing."
She believes Campbell Town is within commuting distance to Launceston and would provide an option for people priced out of the housing market. "Young people find it hard to find employment and affordable housing," Ms Oates said.
"It also has very limited housing stock. Now with the improvements to the Midland Highway it is 40 minutes from Launceston which, itself, is becoming unaffordable."
Ms Oates said she believed the community was supportive of the church's housing plans. She said the parish was in discussions with the Northern Midlands Council and local MPs to determine how to fund the proposal.
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