A demolished public housing estate in Sydney’s inner city suburb of Glebe will be transformed by the NSW government into nearly 500 dwellings.

The development is for social and affordable housing as well as the private market, says Minister for Family and Community Services and Social Housing Brad Hazzard.

"I have no doubt the Cowper Street housing development will be very popular with people eligible for social housing, those key workers who pay discounted rent through the affordable housing component and for private buyers," Mr Hazzard said in a statement.

"This project transforms what was previously a concentrated social housing area into a socially mixed community and creates the conditions to give many people better opportunities in life."

Fifteen public housing blocks in Cowper Street were demolished under Labor in 2011.

The government says the new development will mean a nearly 15 per cent increase in social housing on the site.

But Denis Doherty from Hands off Glebe Inc said that selling off half the public land at Cowper Street to private developers is a disgrace and will do nothing to help solve Sydney's housing crisis.

"Close to Cowper Street is the Wentworth Park Aqueduct where under each arch four to six people sleep rough each night. The Government had a chance to build another 'Common Ground' establishment on land it owned in a key area yet they passed it up for a quick and shameful profit," Mr Doherty said in a statement.

"The Inner City needs affordable homes for essential workers such as nurses, teachers, police and ferry workers yet only a small portion of the development will provide this."

Construction of the affordable housing will begin in 2016, followed by social housing, with both components set for completion in 2018.

  • If this really does result in a net increase in stock which is allocated to social housing, than that is to be welcomed.

    At the moment, the social housing waiting list in NSW stands at 60,000 and is ten years long. Presumably many of those who qualify but can't get in are either in some kind of temporary arrangement or are sleeping rough.

    It is a social crisis which cannot be allowed to continue. There is an urgent need to drastically boost the number of dwellings available to society's most vulnerable not just in NSW but Australia wide.

  • The implementation of this project comes after many years on a slow simmer. This and many projects with similar benefits could have been committed by the former Labour government in NSW. But they were such a bickering lot that power seemed more important than getting on with the job. I remember working with Landcom to put this project together years ago. The concept has not changed since. One would have thought these sorts of projects are what Labour should be good at. Not so, just look at the delivery of the additional social housing under the Rudd post GFC economic stimulus. The challenge now for the NSW government will be to extract more for less. The current methods of project procurement are expensive. And there is room for some new housing delivery models which address the needs of both able and assisted renters. Given the likelihood of long term political stability in NSW the challenges of a more sustainable supply of viable housing can now look forward to long term policy attention. The demand for new stock will not go away, but it needs to be the right stock. One senses that addressing this is now getting priority attention.