Castletown commissioners are hoping to bulldoze an estate and build 133 homes.
The local authority has applied for permission to replace the Westhill and School Hill development, which currently has 101 homes.
In its application, the organisation says it could almost double the number of parking spaces and vastly improve the road layout.
94 houses would become public sector homes, while 39 would be sold on the open market - with 10 falling under the house purchase assistance scheme.
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