But objectors say the scheme for 182 units of care accommodation and a 75-bed nursing home and dementia unit at the Hencote estate off Ellesmere Road would put extra pressure on local health services, attracting retired people from out of the county to settle there.
The planning inquiry which opened at Shrewsbury's Shirehall on Monday followed an appeal by Senescura Ltd against the refusal of planning permission by Shropshire Council in April 2022.
However the inquiry was told at the opening that the applicant had since then offered a sum of money for affordable housing as part of the benefits of the scheme and that Shropshire Council now believed that the material benefits were sufficient to outweigh the original decision to refuse permission.
Inquiry inspector Louise Nurser said she would consider the new offer - but the public inquiry at Shirehall must still go ahead.
Original reasons for refusal included the land being outside Shrewsbury's development boundary.
Hugh Richards for the council said that, taking into account the benefits of the unilateral undertaking to contribute to affordable housing, the material benefits were now sufficient to allow the development to go ahead.
Nearby resident, Ben Jephcott, speaking to the inquiry said he and other residents were astounded by that decision of the council. He said the £1.3 million contribution was a drop in the ocean.
He said Winney Hill, where the care village would be built, could be seen from some way away and said the plans were for three- and four-storey buildings on that hill.
It was close to an environmental Site of Special Scientific Interest, he said.
He said it was accessed off Ellesmere Road, which was exceptionally busy between 7.30am and 10.30am and again in the afternoon peak period. He said people were concerned about the amount of traffic the plans, which include a 250-vehicle car park, would generate.
For the applicant James Donagh said: "There is nothing else like this in Shrewsbury, there is a need right now."
A protest was held outside Shirehall before the start of the inquiry, which is expected to last three days.
Among those at the protest were Liberal Democrat councillors.
They included Shrewsbury Town Councillor Alex Wagner who said: “Winney Hill is an important local landmark and the repeated efforts to develop on it are rightly being met with fierce resistance by local residents.
“We can’t lose sight of the fact that Shirehall’s own social services and elderly care team objected themselves to this. They fear the burden it will put on Shrewsbury’s NHS and the already dire local shortages of nurses and social care staff.”
The inquiry inspector will make a site visit to Winney Hill as part of the three-day hearing.