The Church of England’s Chichester diocese is seeking planning approval for the development from Horsham District Council.
But objections are being put forward by a number of local residents.
The diocese wants to build the 10 houses - including a new parsonage, church car park for 20 cars and churchyard extension - on West Glebe field, off Church Place, Pulborough.
The site is a large parcel of land between the mainline railway and St Mary’s Church.
Developers Millwood Designer Homes say that a fully-accessible public open space would also be provided, along with the houses.
The houses themselves would consist of one two-bed property, six three-bed homes, two four-bed houses and a new four-bed parsonage.
But local residents have lodged concerns with the district council. They say that the land is not earmarked for housing in the village’s neighbourhood plan.
And they fear the development, if it went ahead, would be damaging to the nearby conservation area.
There are also concerns that the development would destroy wildlife and its habitat and introduce light pollution.
One resident said: “It would be an overdevelopment of one of the last and very few open green spaces in the village.”
There are also fears of traffic problems on narrow roadways in the area.