Cunninghame Housing Association is working with Dumfries and Galloway Council and hoping to build 500 new homes in the local area in the next five years.
And Lochmaben has been mooted as one location alongside Gretna, Eastriggs, Springfield and elsewhere.
The project is based on the Strategic Housing Investment Plan (SHIP), which was drawn up by the local authority in 2010.
However, the development has worried Lochmaben Community Council who fear the royal burgh’s resources are already stretched.
Vice chairman Tony Hancock said: “Increasing housing in the area would lead to an increase in the already chronic traffic problems in and around Lochmaben, with over 8000 vehicles passing through the town on a daily basis.
“Parking on the high street and surrounding local roads has reached saturation point. “The local primary school is at capacity as is the local medical practice.”
He added: “There is talk about jobs, how many of the jobs related to the building of the proposed new homes will benefit local Lochmaben residents?
“What community benefits and local jobs will be created for the existing Lochmaben residents and new residents of the proposed social housing?
“There is overall concern in the town that there has been too many housing developments in Lochmaben and the infrastructure of the town is inadequate, in particular with regard to concerns over water and sewage supplies.”
However councillors were more positive about the development.
Annandale North Councillor Stephen Thompson said: “There is a clear need for new housing in the region that’s fit for the 21st century and enables families and people of all ages to live in a safe and healthy environment.
“The council will have to decide how best to meet the demand by working with new and existing developers but we still have to make sure that we get the right types of housing in the right places.
“A new development can have a big impact on our existing towns and villages, as well as local schools, health facilities and road infrastructure, so while there are obvious benefits, developments should be appropriate and sensitive to the existing community.”
Fellow councillor Doug Fairbairn added: “Ahead of the meeting, as local councillors we would hope to see further detail on what Cunninghame Housing Association are planning in terms of development in Lochmaben and elsewhere.
“If the plans are suitable, then hopefully there would be a boost to local people in terms of employment but we will be studying the plans in finer detail ahead of the meeting next month.”
Responding to the fears, Cunninghame Housing Association chief executive Frank Sweeney explained nothing had been set in stone and it would be too soon to comment on individual areas.
