The new buildings are attracting Jewish settlers from across Israel -- many motivated by the offer of affordable housing rather than political ideology.
"After years of civil war in Syria, everyone knows that the Golan Heights is quiet, green and blossoming," Israeli Prime Minister Naftali Bennett said at the unveiling of the plan, which still needs cabinet approval.
"The Golan Heights is a wonderful option for people who work from home and prefer clean air, space and quality of life."
Israel annexed the territory on 14 December 1981, in a move not recognised by most of the international community.
Bennett vowed this was the "moment" to settle the Golan Heights, citing the 2019 recognition of Israeli sovereignty by then US president Donald Trump, and stating his successor Joe Biden's administration had "made it clear that there is no change in policy".
At least 25,000 Israeli settlers live in the Golan Heights, along with at least 23,000 Druze who remained on the land after Israel captured it.
The majority of the Golan's Druze -- who traditionally follow an offshoot of Shiite Islam -- still consider themselves Syrian. Most do not hold Israeli citizenship.
"Today, for the first time, the number of settlers is larger than the number of (Druze) residents," said Nazih Brek, an urban planner at Al-Marsad, an Arab human rights organisation in the Golan documenting the Israeli occupation.
"Historically, Israel has used settlements and the presence of civilians as a continuation of military occupation," Brek said. "The two are interconnected."
Most of the Golan's Druze live in five villages by the Syrian border, some 40 kilometres (25 miles) north of Katsrin.
Brek, speaking in Majdal Shams, a crowded Druze village with none of the manicured streets of Katsrin, believes Israeli settlement expansion won't materially affect residents.
"Land confiscations were already completed at the start of the occupation," he said.
But he fears it will impact the complex identity of Druze residents, concerns shared by Hany Zahwah, a university student from the Druze village of Buqata.
Zahwah said his generation is facing an identity crisis and a process of "Israelisation".
According to Zahwah, the Druze community has been divided by the civil war in Syria -- and Israel had used the opportunity to influence the younger generation.
Zahwah says Israel has sought to neutralise their Syrian identity by "playing the religious card" and comparing them to the 120,000 Druze citizens of Israel, who serve in the Israeli army.
Some young Druze in the Golan that Zahwah grew up with have opted to become Israeli citizens, going against a decades-long tradition of maintaining their Syrian identity.
Apartzev, the mayor of Katsrin, calls for "respect for the endemic population" and views his settlement as a "very pluralistic community, very life-affirming and respectful of everybody".
The mayor, who like hundreds of thousands of other Jews emigrated to Israel during the collapse of the Soviet Union, said the Druze community "are an integral part" of the Golan.
"You can see it in construction and planning, in education and in health, the teachers, doctors and nurses," he said.
A mixed school was being built for students from Katsrin and nearby Buqata, he said.
But for Zahwah, it was unthinkable for him to live in one of the new developments in Katsrin.
"As a peaceful resident of the Golan, my priority is to maintain my identity," he said.