People living in a city centre neighbourhood fear it is becoming a "dumping ground" for people with complex needs, police have warned.
Cardiff council had block-booked two hotels to house up to 140 homeless people at the start of lockdown.
But with the hotels looking to reopen to paying customers, the council is applying to convert a block of student flats in Adamsdown into 46 flats.
The council said the flats on Newport Road will be self-contained.
It added that a high level of support will be provided on-site.
The accommodation would cater for people with drug problems and mental health issues from as early as September, the council said in its application.
It explained the council urgently needed to find accommodation to house homeless people who will soon need to leave the Oyo and YHA hotels in the city.
The application will be heard by the planning committee on Wednesday, including concerns from councillors and South Wales Police.
There is a cluster of services for vulnerable people in the area, including a young women's hostel, sheltered housing for young families fleeing domestic violence and two homeless hostels.
In its representations to councillors, police said officers respond to a "high number" of calls related to crime in the area, according to the Local Democracy Reporting Service.
"There are already three other similar developments within the area, and any further development could potentially impact on police resources," the statement continued.
"Feedback from many residents, including those who attend Adamsdown Pact [police and communities together] meetings, is they feel Adamsdown is becoming a 'dumping ground', with many people having complex needs."
A local councillor fears the development could lead to increased exploitation, community tension and a spike in crime.
"This is not an affluent area, where we have been seeing problems with criminal gangs targeting some of the most vulnerable in society," said Labour councillor Owen Llewellyn Jones.
He said he was concerned about putting "more and more vulnerable people all in one spot".
"We're making it very easy for the criminal gangs to prey upon these individuals," he added.
A homeless charity has also hit out at the plans, claiming the scale of the project would make it hard to "maintain safety".
Wallich chief executive Lindsay Cordery-Bruce said the evidence suggested "this isn't going to work" because "we need dispersed units throughout the community... so we're integrating people in the wider community".
Cardiff council said its plans were based on a review of "best practice across the UK and the rest of the world".
"The important factor is that the accommodation is of good quality and that a wide range of support services and activities are offered on site," said councillor Lynda Thorne, cabinet member for housing and communities.
"The progress we have made during the pandemic has proved that having the right accommodation with the right support is crucial to being able to help people to turn their lives around."