The Canberra Times reported the government's overturning of a ban on a hotel and childcare centre being built on the block alongside a number of ACT Heritage-listed buildings.

Planning Minister Mick Gentleman has said the "technical amendment" to allow a hotel on the site would not change the actual height or size of any proposed developments, under a tender for the development of the precinct that is yet to be awarded.

But Kingston and Barton Residents Group's Rebecca Scouller said residents were concerned the changes would see another hotel developed in the area, with three other hotels already "on the horizon in Kingston, Griffith and Forrest" and possibly a fourth on the Kingston Foreshore peninsula.

Ms Scouller said residents were also disappointed that "after all their promises the ACT Labor-Green government is back to its old ways and not consulting on development proposals".

While the Section 49 development has been zoned for "mixed use", including commercial developments, in tender documents, the government had promoted the precinct as a creative hub for "Canberra and the nation" in a recent promotional video online.

Hotel and childcare developments were also previously listed as "prohibited developments", but the technical amendment would allow them to be developed on site, as long as they were consistent with limits on size, height and line of sight guidelines in plans for the precinct.

Ms Scouller said the focus was meant to be on creating "a fantastic arts precinct" that brought together arts organisations, used the Heritage-listed buildings and enhanced "an already-popular site for visitors".

"It was meant to about mixing new buildings with heritage ones, creating an artistic vibe and attracting locals and tourists to the area," she said.

"It now appears to be more about maximising developers profit than about a creative arts hub for Canberra."

Ms Scouller said that if the government had wanted to properly consult the community about the change in the nature of the development, "they could have notified the arts organisations and local community that the amendment had been listed for comment".

"It is the process that allowed the technical amendment that is the concern," she said.

"How many technical amendments will happen before the community and arts organisations are consulted?"

She said the proposal was a great opportunity for Canberra and the arts community, but there was only one chance to "get it right".

Mr Gentleman said the changes did not allow for "increased density" on the site, and the limits for the sizes and shapes of buildings had not changed and that none of the Heritage listed buildings would be sold.

"For the Kingston Arts Precinct to succeed it will need to attract retain a diverse range of people, visitors, artists, businesses and employees," he said in a statement.

"The potential for a future hotel or child care centre can both assist in achieving this outcome."