Residents forced to flee their homes in Sydney's Mascot Towers will no longer have to bankroll their temporary accommodation with the NSW government announcing a "one-off" deal and promising the biggest ever shake-up of the state's construction industry.

The 10-year-old building in Sydney’s south was evacuated on June 14 after engineers became concerned about continued cracking in the primary support structure and facade masonry.

Since then residents of the 132 units have been forced to sleep away from home, with costs quickly adding up as officials scramble to determine who is at fault.

Minister for Better Regulation Kevin Anderson announced the state government would reimburse residents’ temporary accommodation costs under a loan, capped at a daily rate and for up to three months, on Sunday.

“Ultimately we’ve got to do the right thing by them, they’ve been in a terrible situation,” he told reporters.

Calling the issue a “spaghetti mess”, the minister denied the government’s decision would open a can of worms, saying it was a “one-off” deal.

The money will come from the interest accumulated in Fair Work’s rental bonds fund and will be a loan to be paid back when insurance on the building kicks in.

On the ground, residents said the deal would help them move forward but they still need answers.

Fabiano Santos and his partner bought their “dream home” in the damaged towers just two months ago, now they’re sleeping on a friend’s couch.

“Its starting to make us sick, that we have our dream home for two months and now we’re homeless,” he told reporters on Sunday.

“It’s a lot to digest.”

Source: AAP