A community fears a historic building is being left to rot because it is in the wrong part of town.
The vacant Victorian house in Wellington Road is now occupied by squatters and residents fear it has been earmarked for demolition.
They say the house, which was built in 1850 and was home to the man who built the first locomotives in Brighton, is the last Victorian villa in the area and should be safeguarded.
Paul Caddick, 44, of De Montfort Road, said: “This building is a key part of Brighton’s history by its association with the development of the Southern railway.
“Why destroy the city’s heritage just because it is not in Kemp Town or Montpelier?”
Residents are concerned that holes have been made in the roof and the windows have been bricked-up, fuelling speculation that full demolition is the main agenda.
The villa has been earmarked for major development by owners, The Baron Homes Corporation, since it bought the building in 2006.
The council approved plans in 2008 for part-demolition and construction of a new three-storey block of 25 self-contained flats with a drop-in centre.
The three-year time limit for implementation expired in 2011 and agents have applied for an extension which has triggered a further round of public consultation.
The building has been empty since 2004 and is next door to derelict council-owned Ainsworth House, which has also attracted squatters.
A council spokeswoman said: “The council and the police are aware of squatter activity at 18 Wellington Road, which is a private property.
“The landlord is responsible for any legal process to resolve the issue.”
Council leader and ward councillor Bill Randall said the authority had consulted residents about the planning application for 18 Wellington Road, and would consider all comments received by the planning committee before a decision is made.
The council is expected to decide the fate of the villa at a meeting on March 12.
Baron Homes, who manage a portfolio of property for Brighton and Hove City Council, were unavailable for comment.