A nursing home owner says he has no plans to close the service despite wanting permission to turn it into a hostel for the homeless.
Janek Masrani said his bid for a change of use at the Sunningdale home in Hove, was a precaution in case he could not meet new care standards.
Residents fear any change would lead to a surge in crime in the quiet street they share with the 26-bedroom nursing home, a Grade II listed building in Eaton Gardens.
Nearby residents received letters from Brighton and Hove City Council at the weekend giving them until November 27, to respond to the application.
David Boyce, of Eaton Gardens, said: "This hostel will no doubt introduce drink, drugs and crime problems to an otherwise pleasant neighbourhood containing many of the town's vulnerable elderly.
"I am not suggesting that, with more than 30 new homeless people a month descending on Brighton, these establishments are not needed.
"But surely more thought is needed regarding placement if we are to protect Brighton and Hove's existing residents."
Three years ago, residents' objections scuppered plans for a drugs and alcohol rehabilitation clinic in Eaton Gardens.
If approved, Mr Masrani's change of use application would cover him for five years if he wanted to replace the home with a hostel.
He said it had been prompted by the new national care standards nursing homes have to meet by 2007.
The extra costs involved in upgrading facilities have already forced some nursing homes to close.
Mr Masrani said: "We're confident we can meet the standards but we will have to wait and see.
"This is a precaution in case we cannot. Being a businessman, you have to keep all avenues open.
"There is a massive problem with homelessness in Brighton, so I think a hostel would be the best alternative.
"The nursing home is not closing down. This application has nothing to do with anyone else. It's an internal management step we've taken."
A city council spokesman said: "We are always concerned to hear of the possible loss of nursing homes.
"We will be making our views clear as part of the planning consultation."
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