Michael O'Sullivan, who heads Beara Chamber of Commerce, claimed farmers would also find it increasingly difficult to build sheds and outhouses if the plan is adopted by the local authority.
He said the groups opposed to the move want the Special Scenic Landscape designation removed from the peninsula, as it would cause hardship and could lead to further migration from the area.
"It is imperative that the current planning restrictions are relaxed to reverse the decline in population being experienced in many areas of west Cork," Mr O'Sullivan said.
More than 80 people recently attended a meeting in Castletownbere to object to the proposals.
Mr O'Sullivan said there was genuine concern that the economy of the region would be affected if the proposed designation was passed.
However, the mayor of County Cork, Cllr Noel Harrington, has claimed that the designation will make it easier for people looking to build one-off housing to get planning permission, provided their sites were deemed suitable.
Cllr Harrington, who is based in Castletownbere, said he was supporting the proposals and urged objectors to enter into dialogue with the council.