Allambi Care chief executive officer Simon Walsh said he accepts that the Hunter-based out-of-home-care (OOHC) provider needed to make changes to its governance following a damning forensic audit tabled last year in state parliament.
The report showed that Allambi, which provides home care for young people and was to receive $76 million in government funding in 2025, had been allowing staff to buy investment properties and rent them through the organisation at above market value.
At the time, Port Stephens MP and Minister for Families and Communities Kate Washington said she was "fed up that we have a system; we inherited a system where funds that are intended and supposed to support vulnerable children haven't been going where they should be."
Lake Macquarie City Council also subsequently released a statement that it was reconsidering its relationship with Allambi and that "the allegations are certainly a concern".
However, the relationship has been mended.
On Tuesday, Mr Walsh, Lake Macquarie mayor Adam Shultz and NSW Minister for the Hunter and Swansea MP Yasmin Catley unveiled a new 10-year tiny home partnership at Belmont North.
The two-bedroom home is on council-owned land, and the building is administered by Allambi Care and funded by the state government's Homes NSW Homelessness Innovation Fund.
A young single mother and child, who were previously sleeping rough, will move into the property next week. A second tiny home in Belmont North was recently occupied.
Asked about changes made over the past year for Allambi to maintain its relationship with the council and state government, Mr Walsh said, "There's been no shortage of challenges that the minister's had looking at the sector and trying to look at governance and everything else.
"Our board has worked really diligently with any of the concerns that were there and that have been raised, and they were more community-raised.
"Ours was a housing initiative that we originally started, like that's where it all came from, but that has all been resolved.
"So, it was only ever 10 houses of people trying to find appropriate accommodation for people that are more vulnerable. But we accept that that needed to be changed."
Mr Walsh confirmed there were no longer any properties owned by Allambi staff being rented through the provider.
The council's director of organisational services, Kate Davies, said due diligence had been completed before entering the agreement with Allambi.
"This is a 10-year temporary lease," Ms Davies said. "Allambi doesn't own the land; council maintains the land, and an agreement in place is for this lease arrangement only.
"We're feeling confident that this is an opportunity for us to trial a tiny home and provide housing for the city."
Ms Catley said she welcomed Mr Walsh and Allambi "with spades" in the NSW government's mission to ease the housing crisis.
"This collaboration between the private sector, the local government and the state government will be a real success story going forward, and we're proud to be part of that," Ms Catley said.
Tiny or modular housing has increasingly become a cheaper and more efficient way for government and community housing providers to deliver new homes.
Last year, the NSW government delivered five modular dwellings in Lake Macquarie at Gateshead, Toronto, Belmont South, and Windale. It was part of the government's $75 million spending on 90 modular homes across NSW in the 2025-26 financial year.
Mr Walsh said the Belmont North tiny homes were Allambi's second foray into modular housing.
"The first person coming in has a young child with them, and we've been able to assist them, and they've already enrolled their children in the local school," Mr Walsh said.
"It's such an amazing outcome for people who are vulnerable in our community.
"From there, the idea is to transition these people into more permanent housing for them and give the same opportunity to the next person to come through."
Cr Shultz has made housing affordability a key focus of his first term as mayor. Last week he delivered a mayoral minute to explore using council-owned lots at Cardiff and Booragul for affordable housing.
"Hopefully we go out to market and get a lot of interest," Cr Shultz said. "They obviously have to do their due diligence. Who knows what it will bring.
"This is the start; this is not the finish."
