Defiant stand: Residents of the Block in Redfern staged a protest on Saturday as part of a long-running campaign for affordable housing in the area. Photo: Anna Kucera

They're called the grandmothers and the Block has been their home for generations.

Kay Hookey grew up in number 98, a narrow terrace in the "black heart of Redfern". Joan Bell's mother was the first official tenant of the Block when the Aboriginal Housing Company was established in 1973.

Now, they are fighting their own people to retain the sacred piece of land.

Local residents and community of the block to rally against Aboriginal housing company that is headed by Mick Mundine. Photo: Anna Kucera

Fairfax reported on Saturday that, after four decades, Redfern's dreams for a community-owned precinct of low-cost housing on the Block are in tatters.

Three weeks ago, the grandmothers pitched a tent embassy under the shadows of towering apartments to oppose the Aboriginal Housing Company's plans to redevelop the area into student accommodation.

On Saturday, 200 more people joined them for a subdued protest to campaign for affordable housing.

Placards read "always was, always will be Aboriginal land" and "this is not private land".

Under the leadership of Mick Mundine, the Aboriginal Housing Company has somehow lost its way, causing a bitter fractures in the community, tent embassy organiser and "grandmother" Jenny Munro said.

The company has declared the Block is now private land and Mr Mundine said on Saturday it was impossible to source finance to build affordable housing for the Aboriginal community.

Ms Munro told the small gathering the tent embassy will remain on the Block until Mr Mundine meets their demands. The crowd vowed to be there when bulldozers come in on July 7.

"You used to walk around the streets down here and there'd be people out everywhere. It was a great place for adults, a great place for kids to run wild and free," said Ms Hookey.

"Now, there's a lonely feeling because no one is there. We were against the land being sold because it's no one's land, it belongs to the community."

Ms Bell said the Block meant more to her than anyone could imagine.

"It's not a big [piece of land] but to us, this land is everything," she said.

The Aboriginal Housing Company has accused the tent embassy of setting up illegally on the Block and defacing a historical Aboriginal flag in the area.