Plans by the New South Wales Government to privatise the supply of public housing in the state will have benefits for private housing as well, according to one development lobby group.


The NSW government announced over the weekend it will tear down a number of ageing public housing facilities in the state and sell the sites to developers, who will be required to build a mix of public and private housing on the sites.


According to the NSW Minister for Family & Community Services Brad Hazzard, the reform, which is expected to be rolled out over the next decade, will see 23,000 new and replacement public housing dwellings built.


Hazzard told the ABC that the plan to mix public and private housing will benefit entire communities.


“What we plan on doing is getting the private sector involved to build thousands of new public houses, but at the same time they'll also be able to mix it in with private housing," Hazzard told the ABC.


“Young people growing up can see that other people do go to work and that other people do actually go and get educated, and try and make sure that they have aspirations for greater things in life,” he said.


“This is about making sure that those who can do it, do it. But those that can't because of other issues like mental health issues and disability issues are well looked after.”


Chris Johnson, chief executive officer of construction lobby group Urban Taskforce agreed with Hazzard on the need for a mix of housing.


“While a split of one third public housing and two thirds public housing will be necessary economically for the private sector to make projects work this split is also desirable socially,” Johnson said.


“Studies have proven that large housing estates comprising only of social housing tenants can entrench social and economic disadvantage for the residents of these estates. Around the world the trend is towards mixing private and public housing,” he said.


Johnson said the government’s decision will also be a boon for the state’s supply private housing, especially in Sydney.


 “The timing is also right to help with Sydney’s housing shortfall, despite the buoyant market,” he said.


“There are signs that housing development is tapering off so the release of large parcels of government owned land for new housing will help provide new sites for redevelopment and more housing supply to the market.”


The reform will also help Sydney move into its next phase as an example of a more modern urban environment.


“Greater densities are now part of the swing underway in Sydney from a suburban model to a more urban city so the timing is right for the renewal,” Johnson said.


 “The new look private/public housing precincts will need to have taller buildings than at present. They will need to become new models of urban apartment living and of medium density in a similar manner to the way Sydney is evolving. This is a win-win situation for all stakeholders.”