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The NSW government will be able to fast-track developments under a massive shake-up of the state's planning system aimed at tackling Sydney's chronic housing shortage.
Councils will determine fewer development applications under the proposed changes but will be responsible for devising more planning strategies with local communities.
Other proposals include providing incentives for developers if they consult with neighbours and the community before lodging development applications and simplifying building regulations.
Planning Minister Rob Stokes says the proposed reforms are designed to cut red tape, and would help the government deliver the 725,000 new homes needed by 2036 as the city's population swells by 1.7 million.
The NSW Treasury estimated there was pent-up demand for up to 100,000 new homes across the state because of earlier constraints on supply, Mr Stokes said on Monday.
"The NSW government is determined to do everything it can, including making the planning system more efficient, to ensure housing supply gets to homebuyers fast," he said.
The opposition's planning spokesman Michael Daley has labelled the plan "pure window-dressing".
"This will do very little, if anything to address the current housing affordability crisis," he said.
"There is nothing in this package that helps first home buyers or deals with the fact that the majority of people likely to buy these new homes are cashed-up and negatively-geared investors".
The draft legislation includes amendments which would allow the Secretary of the Department of Planning to step in if major developments are being slowed because other government departments have not yet responded to planning applications.
The Planning Minister will also have the right to set up an independent planning panel on councils that are stalling on a decision.
The measures come two months after Mr Stokes broke ranks with his federal colleagues to urge them to readdress negative gearing in a bid to help fix the housing affordability crisis in Australia's priciest state.
Federal Treasurer Scott Morrison has repeatedly shot down the proposal, arguing the move would hit mum-and-dad investors in rental properties, push prices up and put immense pressure on the market.