More than 400 social housing units will be built with funding in the NSW state budget - about one-twelfth of what advocates say is needed each year to meet demand.
Some $366 million was promised in Tuesday's 2021/22 state budget, which will fund the new homes and provide for maintenance works on thousands of others.
The money forms part of the governments four-year, $812 million social housing stimulus package announced in last year's budget, but a bevy of community groups and advocates say the funding is nowhere near enough.
About 5000 new homes - 12 times what has been funded - would need to be built each year for the next 30 years to keep up with demand, according to a Community Housing Industry Association report ahead of the budget.
NSW already has a shortage of 70,000 social housing dwellings, the report led by Equity Economics found, and more than 50,000 households across NSW are on the wait list.
With $2.9 billion for social housing announced by the Queensland government last week and the $5.9 billion promised by the Victorian government last year, St Vincent de Paul Society NSW chief executive Jack de Groot says NSW is falling behind.
"Even if it continues at its current pace, it's building at about a third of the rate it needs to be to make a serious dent in the waiting list," he said.
"Depending on where you are and your needs, you can expect to wait more than 10 years to be moved into social housing."
Everybody's Home, the national campaign to fix Australia's housing crisis and end homelessness, says the the lack of investment is stark at a time when the Sydney housing market is galloping away and regional rents are through the roof.
Domestic Violence NSW also voiced concerns the growing housing "crisis" could leave women fleeing violence with nowhere to turn.
"The last thing we want is women having to return to a perpetrator because they don't have anywhere else to go," policy manager Renata Field said.
Community Housing Industry Association NSW chief executive Mark Degotardi said public housing works would bring an excellent return on investment, and the government could easily divert some of its extra stamp duty receipts.
"By building 5000 new social housing dwellings each year, NSW could create 16,200 jobs, generate $5.2 billion in extra economic activity and prevent 750 people from becoming homeless every year," he said.
Housing Minister Melinda Pavey defended the program in parliament, saying NSW was leading the way on social housing funding.
"In the past couple of years, NSW has delivered $9 billion towards social and affordable housing - Queensland, $5 billion and Victoria, $4 billion," she said.
In a statement to AAP, Ms Pavey also said the government supported community housing providers to build their own social housing projects.
"The community housing sector has grown from delivering 68 new dwellings in 2012 to 3282 last year," she said.
"The sector is expected to contribute an additional 3000 social and affordable homes over the next four years."
The upgrading or maintenance of existing public housing stock would also bring extra properties online, as some are currently uninhabitable.
While advocate groups argued the social housing spend was lacking, they all welcomed an additional $57 million to expand the Together Home program.
Sparked by the need to house vulnerable homeless people during the pandemic, the additional spend will support an extra 250 rough sleepers and build 100 new homes.
Australian Associated Press
