The CDC is placing 10 cabins, prefabricated at the nearby prison, at historic Taylor Park, reducing the playing field by about a third.
Milton resident Ray Powell said "most of the town" was unhappy about the development.
"CDC do a good job generally but I think they dropped the ball on this one.
"We’re not bothered about the housing. It’s where they’re putting it — on a 160-year-old park that gets a lot of use by the community and without any consultation.
"Would DCC put cabins up in Queens Gardens or the Botanics [Dunedin Botanic Garden]?"
Milton Volunteer Fire Brigade Chief Fire Officer Robbie Philip agreed the only problem with the cabins was location.
"[The brigade] has used that area as a training ground for at least 100 years.
"We have a fire brigades’ competition scheduled for December but I don’t know if that can go ahead now, the way the cabins are encroaching on our lanes."
"The addition of cabins fits with the existing use of the campsite ... so there was no need to consult on this.
"The decision to add the cabins was made by council, which is made up of elected representatives of the community," one notice said.
Mr Powell and CFO Philip said there was plenty of under-utilised space nearby, but CDC chief executive Steve Hill said Taylor Park’s playing field had been chosen as the nearest to infrastructure services.
"Taylor Park includes a camping ground and historically has.
"Council is consulting with the public over a revision to the Taylor Park reserve management plan now [the cabins] appear to have generated some opposition."
Clutha District Mayor Bryan Cadogan also responded to the concerns.
"We have a collective moral and social obligation to ... alleviate a desperate shortage in accommodation."
He was mortified at what the most vulnerable were forced to endure, he said.
"Taylor Park was the only location in Milton [where] intensification of accommodation was allowed."
The Taylor Park section of the Milton reserve management plan is under review.
The submission period closed yesterday but feedback would be accepted until the conclusion of a public drop-in event next Thursday, Mr Cadogan said.
