Development applications could be automatically approved in councils that don't cooperate with government plans to increase Sydney's urban density, NSW Premier Chris Minns has warned.
Speaking at a lunch hosted by the NSW Property Council of Australia on Wednesday, Mr Minns said property developers had been demonised by some in politics which had undermined public confidence.
A plan to "re-balance" Sydney's urban density with more housing close to the CBD would be released before the end of the year, the premier said.
Asked if the "nuclear option" of the government stepping in to approve new developments was on the table, Mr Minns said he wasn't ruling anything out if councils failed to meet approval targets.
"We've got the powers inside the NSW Government...to enact reforms to pursue housing targets and completions in various parts of the state," he said.
"We don't need any enabling legislation to make that happen."
NSW needs to build 75,000 new homes a year to meet its target agreed to at national cabinet, up from a current annual rate of 48,000.
Mr Minns applauded the "outstanding" work of builders and developers in Sydney, saying widespread criticism had undermined the notion they could work responsibly to build a beautiful city.
"We know that there are bad actors out there," Mr Minns said.
"We also know that the building commissioner is confronting them, and driving a lot of them out of the industry."
Mr Minns said the government would highlight the need for "density done well" and champion innovative and creative projects.
"My sense is that my planning minister and myself have been the first, for a long time, that have come along and said, 'we need more density, we need more housing closer to the city'," he said.
"It hasn't won us a lot of friends in a lot of councils closer to the CBD, but it's necessary for Sydney's growth."
In last week's budget, the government committed $2.2 billion for housing, including $1.9 billion to build supporting infrastructure such as roads, parks, sewers and schools.
The remaining $300 million was allocated for the government's land and property development arm, Landcom, to build a planned 4700 new homes, 30 per cent of which will be affordable housing.
"We can't be in a situation where we've got a higher population but lower approvals than Victoria when we clearly have such a massive need in NSW," Mr Minns said.
