St Vincent de Paul Wagga Central Council president Peter Burgess said the Catholic Church had a moral obligation to do more for Wagga's homeless, rather than just pursue profit.

"For me it's about conscience. Let's be honest about it: in all these things there should be a thought to looking after the needs of our community, not just making a quid," Mr Burgess said.

"If I was one of the people living on the edges in Wagga, and there's a lot of them, I'd be pretty disappointed in the Catholic Church. It's not a good look."

Mr Burgess, who is a Catholic himself, said the church's latest $2.3 million Lloyd land deal was a poor reflection of their Christian values.

Wagga Women's Health Centre founder Jan Roberts said she was disappointed that the diocese was not doing more for Wagga's "social housing crisis", especially given their "enormous" level of wealth in Wagga.

"I believe there are well-meaning Christian people all over the place, but when I look at institutionalised churches all they do is worry about their own economic and political power," Ms Roberts said.

"They own an enormous amount of property, commercial as well as real estate, so to me they're in the perfect position to implement their social justice imperative: to house the homeless, feed the hungry, and look after the orphans and widows, to use biblical language."

West Wagga Parish priest Thomas Casanova said it was important to look after those in need, but that social housing also had its downsides.

"Do to others as you'd like them to do to you: you should put yourself in the shoes of people in need, but you should also put yourself in the shoes of people who have invested in a house," Father Casanova said.

"If there are people going to disrupt the area and your house greatly loses its value, that's also [a concern]. We're talking about real life here. Sometimes people can comment on social issues without knowing what it's like to be next door to a place and constantly sending reports in to police because the rascals are out smashing windows and putting rocks on the road. You've got to be sympathetic to those people."

Father Casanova said some of his congregants were former social housing tenants who had worked hard, secured a job, and managed to leave the social housing system.

The diocese's director of properties Peter Fitzpatrick hit back at the suggestion that the Lloyd and Estella developments would lead to gentrification, saying those claims were "ridiculous".

"We're providing land for people who wish to build their own homes, and that's not gentrification, that's just providing a service to help people get into their own place," Mr Fitzpatrick said.

"We just sell the land without fear or favour, so whoever buys it just does what they do."

The Wagga Catholic Diocese bishop was unavailable for comment.