For 35 years, Judy Ann-Thomas's floral business has brought colour and life to the community of Cheltenham in Melbourne's south-east.

Surrounded by bright blooms in her Charman Road flower shop, Ms Ann-Thomas described the suburb as a "family area".

"It's got a nice village atmosphere," she said.

That atmosphere is set for a shake-up under a state government vision for more high-rise housing in Cheltenham as part of the Suburban Rail Loop project.

In some parts of the locale, which sits along the controversial rail project's path, housing could reach a maximum height of 18 storeys.

Earlier this week, the state government announced draft structure plans for the six SRL East stations — Cheltenham, Clayton, Monash, Glen Waverley, Burwood, and Box Hill.

It said the project would deliver 70,000 additional homes across the six sites, along with more schools, hospitals and green spaces.

According to the plan, height limits would feather out away from Cheltenham railway station, including a maximum four-storeys in residential streets like Stuart and Olympic Avenues, which are part of the historic Pennydale neighbourhood.

Ms Ann-Thomas reckoned further development like the SRL and its associated high-rise towers could benefit her business.

"Business will be good. That's a lot of bodies in the 18 storeys, so that's a lot of wallets," she said.

Concern about 'packing too many people' into suburb

Teisha Sherrard moved to Cheltenham three years ago, drawn to the community's suburban charm and proximity to the CBD.

"We felt like we had a bit of that rural feel closer to the city," she said.

Ms Sherrard said she wanted to stay and start a family in the area, but she felt the precinct plans were too "extreme" and out of step with the neighbourhood's current character.

"We already get a lot of traffic, and back up," she said.

"If we add the high-rise, we're packing too many people into what's supposed to be a quieter space close to the city.

"We don't really want it to be a busy, built-up area."

At Bay Road, which carries thousands of vehicles each day, the government's draft structure plan proposes a maximum height limit of eight storeys.

Peter Konidaris is a director at O'Brien Real Estate, which has an office on Bay Road.

He said the proposal could lead to an exodus of current residents.

"People will want to get out, and they will get approached by developers," he said.

"There's a demand for housing in the area. Unfortunately, like anywhere in Melbourne, these apartments are not designed to go up in value, they're more long-term investments.

Meanwhile, researcher in urban planning and design at Monash University, Liz Taylor, said the government should match its plans for higher density with better amenities.

"That can be parks, public spaces, footpaths, transport. Putting those things in, I think the height comes reasonably secondary to that," Dr Taylor said.

"I was probably expecting something a bit higher."

The Suburban Rail Loop Authority received nearly 10,000 submissions about residents' priorities after the release of its key directions for SRL East neighbourhoods last year.

In Cheltenham, the state government said locals asked for improved pedestrian crossings, especially over the Frankston Line, Nepean Highway and Bay Road.

Community consultation on the path ahead

Minister for the Suburban Rail Loop and Housing, Harriet Shing, said the housing project would take growth pressure off Melbourne's outer suburbs.

"Across the six stations, we know that there is a lot of opportunity, not just to understand the need for better density and for careful planning but also to seize the opportunities around how we want our city and our neighbourhoods to look over the coming decades," she said.

However Shadow Housing Minister Richard Riordan accused Labor of making decisions without the community's input.

"Labor is making sweeping decisions that will fundamentally change the look, feel, character, and use of Melbourne for generations, without asking the people who call these communities home," he said.

A community consultation period will begin this month , followed by an advisory committee and public hearings later this year.

The planning scheme amendments are expected to be finalised in 2026.