The ACT government has drafted a plan for a residential property project of up to 200 dwellings on a block in north Watson, currently open to community feedback.

On the base of the Mount Majura Nature Reserve, the vacant block between the Federal Highway and Aspinall Street is home to the superb parrot, which is listed as a vulnerable species.

With somewhere between 5000 and 8000 birds left in the wild, the superb parrot is mainly present in the ACT region during its breeding season where it seeks out increasingly old and rare Blakely's red gum, yellow box, red box and eucalypt trees.

A mix of apartments up to four storeys high and two blocks of demonstration housing - part of the ACT government's plan to showcase best-practice design and trial different types of housing - as well as a road and one-hectare park have been proposed for the site.

A variation to the Territory Plan will be required to permit the development, which would propose changing the land-use zoning to allow for some community and commercial uses, should the need arise.

The changes would also allow for co-housing to support the delivery of demonstration housing and increase height limitations from two to four storeys for the south of the site, closest to Aspinall Street.

An ACT government spokesperson said two areas of urban open space were being proposed for recreation and to protect important trees for the superb parrot and other wildlife, as well as reducing urban heat.

In contrast with residents' concerns, the spokesperson said an independent contractor undertook an ecological assessment of the site which concluded the development was unlikely to significantly impact any matter of national environmental significance, meaning referral under the Environment Protection and Biodiversity Conservation Act was not warranted.

The assessment also concluded that the development would have no significant adverse environmental impact on any species or ecological communities listed under the ACT's Nature Conservation Act, meaning an Environmental Impact Statement would not be triggered.

Completed in 2017 using data collected in 2016, the report did find that due to the site's proximity to Watson Woodlands and Mount Majura it was likely several threatened woodland birds would visit the area and vegetation may have some value as part of a movement corridor for birds, particularly the superb parrot.

Recent resident to the area Ren Gregori said the 2019-20 bushfires had severely impacted a number of species, and if extreme weather events were likely to become more of the norm, the balance being struck between development and sustainability needed to be reconsidered.

"Life has just substantially changed since 2018 since the first consultation was made, and I just wonder if there's enough data to make an informed decision," Mr Gregori said.

The World Wildlife Fund estimates the number of birds impacted by the 2019-20 bushfires to be 180 million, while studies are still under way to determine the damage.

Separated from the neighbouring lot by two rows of trees, Youth With a Mission Canberra is a Christian camp which provides training to young people from around the world to share their beliefs with others.

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Located on a block of comparable size to the adjacent government-owned land, the site includes a community garden and boarding facilities for up to 150 people.

Plans are currently under way to develop more housing and a childcare facility on the property, as well as a publicly accessible skate park in close proximity to the proposed park.

Director Rod Thorpe said the church group of around 50 permanent residents accepted the build was inevitable and was providing input to help shape the best outcome for the Watson community.

Mr Thorpe said Mission Canberra hoped the rows of trees would be preserved and the housing development would be sustainable and blend in with the natural environment.

"The part that is planned to be four storeys high would be just behind an area that we are potentially developing for a daycare centre, so we're probably not so keen on it being four storeys high up to the boundary," he said.

"But if there was a decent green space between the [properties] then it would make sense."