The vast majority at the Mallard would be classed as affordable.
The Guernsey Housing Association and developers Infinity Construction are asking for permission to build the homes on a business complex car park and adjoining land at The Mallard.
The applicants say 69 of the 85 properties will be 'affordable' GHA homes.
The remaining 16 will be for private ownership, though all will be built to a similar design. There would be 34 houses and 51 flats.
Vic Slade, Chief Executive of GHA, says filing the paperwork this week is a first step towards delivering much-needed new homes for Guernsey.
"By working together, we can provide a mix of both affordable and private homes, which means we can tackle housing needs across different tenures, rather than just one or the other. This is an important step as it's the first of the various approvals we need to take the project forward."
Outline planning permission for the site was given in December 2025.
Only 62 new homes were added to Guernsey's housing stock in 2025, and non were affordable homes, despite house-building being a government priority.
Just under 10% of Guernsey's homes are classed as affordable - either rented or in partial ownership with the Guernsey Housing Association.
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