The high-density housing zones around the region's train stations could double in size
The NSW Productivity Commission made the recommendation in a report to the state government about what could be done to ease the housing crisis.
At the moment, the state government's Transport Oriented Development (TOD) program allows for six- to eight-storey apartment buildings within 400 metres of 37 selected train stations.
The NSW Productivity Commission recommended doubling the radius to 800 metres, and "significantly lift" the height limits within TODs where possible.
Nine train stations in the region have been named in the TOD program, with four in Newcastle at Hamilton, Adamstown, Kotara and the Newcastle Interchange and five in Lake Macquarie at Cardiff, Cockle Creek, Teralba, Booragul and Morisset.
"Doubling the radius of a TOD area to 800 metres quadruples the uplift... 800 metres is a walkable distance to a train station," the report stated
The state government is now considering the report and its 32 recommendations.
Premier Chris Minns said priority would be given to recommendations that would immediately help unblock bottlenecks and support increased housing supply.
"In the coming weeks, the NSW Government will announce its next round of planning reforms," Mr Minns said.
"It will be designed to speed up approvals, cut red tapes, and at the end of the day, build more homes.
"We won't back away from the challenge ahead of us - building thousands of new homes near existing infrastructure for a generation of young people locked out of housing."
The state government's current projections show the streets within 400 metres of Booragul and Teralba rail stations can accommodate a total of 14,000 dwellings over the next 15 years.
The numbers suggest Booragul can accommodate, Cardiff could accommodate about 6100 new dwellings, Kotara 5400, Adamstown could host 5100, Hamilton 4800, Morisset 3500 and the Newcastle Interchange 2800.
However, the construction industry criticised the ambitious numbers and said they were highly unlikely to be achieved.
'Not a silver bullet'
Property Council Australia's director for the Hunter and Central Coast, Amy De Lore, said expanding the TOD zones "could potentially help" but it was by no means a silver bullet.
"We're hearing that councils with TODs aren't yet seeing the level of interest that government has promised and there's no doubt feasibility is an issue," Ms De Lore said.
"Scaling up the TOD to a radius of 800 metres is a one-size-fits-all approach that might work for precincts like Broadmeadow, but it may not be appropriate for all station precincts."
"Government can't rezone its way out of a housing crisis, but it can pull levers around taxes and charges currently putting the brakes on housing delivery.
Lake Macquarie City Council integrated planning manager Wes Hain agreed that it was not clear if expanding the TODs and increasing their height limits would increase housing locally.
"Recent development industry analysis for the Lake Macquarie locations included in the TOD program indicated that development feasibility was a concern," Mr Hain said.
Urban Development Institute of Australia (UDIA) Hunter chapter chair Jeffery Bretag backed the report's recommendations.
"All Hunter councils and government agencies should follow the advice of the Productivity Commissioner and adopt a pro-housing regulatory environment," Mr Bretag said.
"Home buyers and developers are making significant contributions to infrastructure. Our Building Blocks report and Productivity Commissioner report make it clear the government needs to be investing with much more urgency."
A City of Newcastle spokesperson said the council supported planning for future growth and pointed to its draft plan Broadmeadow, which could have 20,000 new homes over the next 30 years.
