The ACT Legislative Assembly's planning committee is examining a draft variation to the territory plan for the Calwell group centre in Tuggeranong.

The draft variation would double building heights on the eastern side of the shops from two to four storeys and allow residential dwellings to be built there, so long as the bottom floor of the building was commercial tenancies.

The variation is supposed to encourage the "rejuvenation" of the group centre and to "direct development within the centre over time".

However the owners of the sites being rezoned told the committee on Wednesday it will instead kill off their plans for redevelopment and fail to deliver the vision intended for the centre.

Arthur Tsoulias, whose father built the centre nearly 30 years ago, said the existing shops were struggling and introducing extra retail to the area would compound their problems.

"The last 10 years [it] has changed and the next 15 years it's going to change a lot more," Mr Tsoulias said.

"Apart from the liquor shops and butcher which are doing well, the rest of the shops are struggling. The takeaway is not doing too bad but the video shop, post office, the newsagency, that's gone.

"The restaurants, they're pretty much dead during the day because everyone's left the area and gone to Civic or Tuggeranong to work so the amount of people we've got during the day to sustain that many shops, they're struggling.

"The medical centre we got about six year ago, that took about 1200 square metres of space which saved us because we had that vacant for so long, that was like six shops.

"For us to get more commercial space in there around the centre, it's only going to be hurting us and the tenants that are there now."

Canberra Town Planning principal Pieter Van de Walt said in a submission a number of the new requirements would "make development of this site unfeasible, to the detriment of the future viability of the Centre".

He told the committee there was already "a lot of retail for the size of the centre" and adding more would "cannibalise the offering that's already there".

Mr Van de Walt also said the site that had been rezoned was largely occupied by a Woolworths, which had just signed a new 10 year lease, with an option to extend for another 10 years.

"If you insist on having the residential box on top of the supermarket that's a bit of a problem, we can't get access to it because Woolworths will not allow us to build on top of them and we won't be able to access car parking underneath them as long as they operate ... so the master plan is all good and well but that's not a realistic outcome," Mr Van de Walt said.

However Planning Minister Mick Gentleman said new rules were developed with the interests of the whole community in mind, not just commercial developers

Planning and Urban Design Policy manager Alix Kaucz said the planning directorate included the potential for ground floor residential in the draft masterplan at the urging of the Tsoulias group, but dropped it from the final document after the community did not support it.

She said Transport Canberra and City Services had advised them against ground floor residential, due to the prospect of headlights shining in living room and bedroom windows at night.

The inquiry continues.