PART of an industrial estate could be cleared to make way for 390 new homes.
The plans for the North East Industrial Estate, in Peterlee, have been submitted by Durham County Council as it aims to meet the 1,830 new houses it says are needed to meet demand in the town and Horden.
It says a total of 31,400 are required across the county by 2030.
The authority has put together the application for the site in Stephenson Road, where some buildings are dilapidated and others have already been knocked down.
Some businesses will need to move if the proposal goes ahead, with the council and Business Durham asking firms to be affected to take part in confidential talks to discuss what they may need to relocate.
NTE Limited, which has been based on the land for 20 years, has said there should be a condition put in place to ensure financial compensation should be given for relocation.
It employs 27 people and three subcontractors, generating a turnover of £5.5million.
Kookaburra, which has undergone recent reinvestment, would continue to operate from its base on the estate, as would Walkers and a doughnut factory.
Nearby community facilities, including schools, shops, playing fields and healthcare services, as well as bus stops, would be a bonus to new residents.
A new road would link Thorpe Road and Yoden Road to set up a better route for traffic, public transport, walkers and cyclists.
Last year, the council approved plans for 9000 new homes on nearby land at Lowhills Road to the north of the industrial estate.
As part of its conditions, an agreement has been put in place to see £1.55million pumped into affordable housing and regeneration of the housing market in East Durham.
Because of that, the council say its proposal should not be subject to the requirement to provide 10 per cent of the industrial estate plot for affordable housing at this stage.
If approved, the council say £195,000 should be given towards play and recreation in the town and a recruitment campaign would be run.
The plans will be discussed on Tuesday, July 1, at 2pm at County Hall.