Reside Developments has requested permission to demolish all the existing buildings, including Willowbrook Riding Centre, at Hambrook Hill South.
This would then allow for the erection of 73 dwellings including three custom/self-build plots, parking, landscaping and associated works.
CHPAG (Campaigning for a better future for Chidham & Hambrook) raised concerns that the villages will 'have to deal with all of the new residents' cars'.
They added: "Traffic from this proposed development would have to travel down narrow Hambrook Hill South, Priors Leaze Lane and Broad Road before getting onto the already congested A259 junction to head East and West
"No indication is given of how this proposal would meet the needs of local residents regarding housing size and type."
There have been eight official objection letters and comments to the plans, which were submitted last month.
The campaigners added: "This development is the worst of both worlds for residents.
"It is a site with land for the 73 houses in Southbourne parish, but with the main application site location and site entrance / exit in Hambrook.
"This means Southbourne Parish has to fight the development, not Chidham, as the field site is in their HELAA (Housing and Economic Land Availability Assessment) plus they’ve already allocated out where all their CDC (Chichester District Council) housing allocation is to go in their Neighbourhood Plan."
The developers said the application proposals have 'evolved in response to the feedback' received through a pre-application enquiry made to Chichester District Council.
They added that the proposal provides a 'high-quality residential development' that 'responds positively to the locality'.
A spokesperson said: "Access to the site will be granted from a new central vehicular access point from Hambrook Hill (south), east of the site.
"The design of the scheme is illustrative but has been designed to show that a high-quality environment can be achieved for the number of dwellings proposed.
"The proposed dwellings respond positively to the surrounding locality of the area through the careful consideration of materials.
"The layout has been sensitively designed with each dwelling being significantly set back from the site boundaries with additional planting proposed to ensure a strong buffer is provided around the site.
"The site itself will then be softened with additional planting to provide ecological and landscape benefits and there is a 7 large amount of open space available for residents and enhancements to the stream corridor."
To have your say on the proposals, visit the Chichester District Council planning portal and use the reference number 21/01910/OUT.