They have also warned the government needs to appropriately select tenants to keep women and children fleeing violence safe.

The Common Ground project will offer permanent supportive housing for people who have experienced long-term homelessness as well as affordable housing for people on low incomes.

It will be the second Common Ground project in the ACT, with 40 units opening in Gungahlin in 2015.

Greens housing spokeswoman Caroline Le Couteur said she welcomed the progress at Common Ground but said the needs of the most vulnerable - like women fleeing domestic violence - must be thoughtfully considered.

"For example, women and children escaping violence should not be in a location that may be known to perpetrators," Ms Le Couteur said.

She also questioned whether older women were the best cohort for the housing model.

"Older women often do not need such long-term and high levels of supports as a Common Ground model provides - they just need to be able to rent at affordable prices," Ms Le Couteur said.

"We hope that the building will include sustainable design elements, such as reliance on natural light, energy-efficient heating and lighting systems, sufficient ventilation, low-toxicity paints and materials to protect indoor air quality, and perhaps even green roofs.

"We know that human wellness and environmental sustainability are closely linked and this is a great place to focus on this."

The Greens are also calling on the government to expand the existing Common Ground site in Gungahlin as a priority.

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ACT Council Of Social Service executive director Susan Helyer said while Common Ground was a valuable component of the housing market, there still needed to be a variety of housing choices.

"In an environment in which there are massive gaps in the housing market for quite a diverse range of people and age groups, and the ongoing unmet demand for supported housing that's suitable at different points of life, it's impossible for any one model to meet every need," she said.

"We still need to think about what the right mix of housing options and tenancies is that will create safe, inclusive, and cohesive environments.

"I think the issue is we are constantly trying to target [groups] but what we actually need is a multitude of options."

The government recently began pre-development application consultation and consultation for required variations to the territory plan.

It is also looking for local builders, businesses and community groups to support and contribute to the delivery of the project.

The government has budgeted $2.4 million for planning and preliminary work on the proposed Hawdon Place development, which would include 20 social and 20 affordable housing units, as well as a cafe, social enterprise space and a communal garden.

The mix of one-, two- and three-bedroom units would accommodate people facing chronic homelessness, including older woman, children and single parents.