One homeowner in Kings Furlong said they were fearful the halfway house, if approved, would be a 'sweet shop' for drug dealers.
The proposals - put forward by homeless organisation Two Saints and supported by Basingstoke and Deane Borough Council and Hampshire County Council - would see 180 Culver Road knocked down and replaced with a new accommodation block.
A full planning application is expected to be submitted this month, with public consultation promised.
However, residents of Culver Road are worried about the planned location, citing concerns about drugs and violence in a family housing area.
One resident, aged 66, told the Gazette: “I am dead against them building up there. We have children here and everything.”