The houses are on State Highway 1 near the bottom of the Caversham Hill and are in the way of the planned widening of the motorway and the "easing" of a curve.
The agency confirmed this week $6.6 million will be spent on design work and property purchases.
Property owners received a letter from consulting firm Opus, inviting them to meetings to find out how the upgrade will affect them.
Those spoken to by the Otago Daily Times on Thursday knew they would be expected to sell to the agency, and regional director Bruce Richards confirmed the Public Works Act applied to the project.
The Act provides for compulsory acquisition.
Poet Gaylene Corin has lived in her elderly villa, a few metres from the motorway, for 20 years and says she is one of the residents who does not want to move.
"I like living by a motorway. It makes me think there's a world going on out there."
With traffic noise making conversation virtually impossible on her doorstep, Ms Corin invited the ODT into the quiet interior of the home she and her partner bought for $50,000.
She said it was a comfortable place to live and although her parked car had been written off in a crash some years ago, there were fewer safety issues since a speed camera had been installed nearby.
Ms Corin said she would move if she had to, but did not want to.
She and her partner were mortgage-free and did not want to be forced to go into debt again.
"I want a freehold place to move into. We've done a lot to get this.
"I will hold out until the very, very last minute."
Lisa Ferguson, her partner Nathan Jackson, and their three children bought their first house by tender two and a-half years ago for $116,001.
They had struggled to find $45,000 to renovate the "revolting" interior and Mr Jackson said it had been "two years of agony and pain".
He estimated the property now to be worth $300,000.
Ms Ferguson said they did not know about the motorway upgrade when they bought the house, but now have a plan showing the motorway running through their front bedroom.
She was concerned about the dangers of bringing up three young children so close to the motorway and the couple were not against the idea of moving, provided they got a fair deal from the negotiations.
Some of the houses have owners with Australian, United States and Mosgiel addresses.
Tenants spoken to were relaxed about the prospect of having to move.
One said the safety of her two young children was an issue, but the attraction of living next to the busy motorway was the weekly rental of $200 for a tidy three-bedroomed house.
Another property owner, resident for almost 30 years, recalled some houses bought for previous Caversham Valley motorway proposals had been sold back to their original owners.
The latest developments were not causing her any anxiety and she would deal with events as they unfolded.
