The district council has unveiled proposals for 8,821 homes in the region over the next 17 years, including 4,000 for neighbouring local authorities who are unable to meet their own housing targets.
However, the Save the Lower Penn Green Belt (SLPG) action group says the so called 'duty to cooperate' with other councils is based on outdated figures and should be urgently reassessed.
The group is battling to save sites including one to the north of Langley Road in Lower Penn, which has been earmarked for 390 homes.
It has warned that sacrificing the green belt for housing for Birmingham and the Black Country will lead to a vast increase in traffic, clogging up the roads and damaging the environment.
Members have joined forces with Lower Penn Parish Council to challenge the council's housing numbers, which also include 1,153 homes added as a "contingency".
They have taken on a consultant to examine the figures and plan to submit evidence as part of the local plan 'preferred options' consultation, which runs until December 13.
In a statement, the group said: "The land allocation for 4,000 houses that South Staffordshire Council are giving over to neighbouring authorities, which include housing for Birmingham and Black Country under the duty to cooperate, along with housing supposedly provided to 'increase flexibility within the local plan' are based on out-of-date information and we are intent on challenging this."
The statement added: "The council admit that 80 per cent of the land in South Staffordshire is green belt, however rather than protect it they are voluntarily taking additional houses which will encourage more people to commute back into the Black Country.
"It’s time for the council to reassess its policies in the light of up-to-date evidence."
The group has called on South Staffordshire to "follow the lead" of Lichfield Council, which reduced its duty to cooperate numbers by 40 per cent.
The Langley Road site is under threat despite campaigners warning that it suffers from flooding and plays a vital role in supporting biodiversity.
Other sites put forward in the plan include land off Linthouse Lane in Essington, which has been lined up for 1,200 homes, while 1,200 homes are set for Cross Green in Coven.
Councillor Terry Mason, cabinet member for planning at South Staffordshire District Council, said the plan had been prepared "based on the most up-to-date evidence".
"The plan seeks to balance the protection of our green belt wherever possible, while at the same time providing homes to meet an established housing need, including that under our legal duty to cooperate," he said.
"Throughout the process we have engaged with the relevant Government departments and advisors regarding our obligations under such duty.
"By exploring all options available, we have managed to limit our use of green belt land to approximately 1.4 per cent of the total in the district. However the purpose of the consultation is to allow people to challenge our choices, where they have valid planning reasons, and make alternative suggestions which they feel may be more appropriate.
"For this reason, we are encouraging as many people as possible to have their say and anyone who wishes to make a representation should sign up to our consultation portal.”