More than 50 Finchfield residents attended a public meeting on Tuesday to hear about proposals for council-owned land at the Wolverhampton Environment Centre (WEC) which backs onto the Smestow Valley Local Nature Reserve.
Alison Fowler, estates valuation and disposals officer at Wolverhampton council, told the meeting the cash-strapped authority was considering selling a small section of the 16.5 acre site to developers but that no more than 13 homes would be built.
She added the income from the sale would be 'ring-fenced' and used to create allotments at the WEC, as well as to improve the neighbouring nature reserve.
Despite her assurances concerns were raised over access to the development off Westacre Crescent, increased traffic, wildlife at the WEC and the erosion of green spaces.
Others who were present said the Smestow Valley Local Nature Reserve would benefit from a cash injection.
Ms Fowler, said: "The whole site would not be filled up with housing. In fact 90 percent would have no houses and will go into the local nature reserve for the public of Wolverhampton to use.
"In addition we are looking at it for providing allotments for local people along with a car park for users of those allotments and for walkers.
"There will be a small part of the site for new development but only where the glass houses are at the moment."
The huge glass houses at the WEC were once used to grow flowers for the city's parks and for road side displays.
It was later used to train young people not in education, employment or training in groundwork, but in recent years has not been used.
The public meeting, held at Smestow School, was organised by the Finchfield and Castlecroft Community Association (FCCA.)
Chairman Andrew Atkinson said it was held in response to "alarmist and incorrect" information circulating between residents about the proposals.
FCCA member John Rowley said afterwards those opposed to new homes could work together on an alternative proposal.
He said: "First of all I think the residents were pleased to get some information about what is happening.
"I get the feeling most of them did not want housing at the WEC and they would prefer something else.
"There was enough people expressed an interest in an alternative to get together and see what can we can do in partnership with the council."
Mr Rowley said he would like to see the land retained for community use.
He added: "Ideally the house there would become a small community centre with a cafe and the buildings would be to store equipment for allotments. I also have a rather fanciful idea for an orchard there.
"On the estates around the WEC football and cricket are not encouraged on the green spaces and there is a problem for young people in that there are no extra outdoor activity spaces.
"I would like to see a focus on providing facilities for young people."