A proposal for homebuyers in NSW to pay land tax rather than stamp duty has attracted support from a key social justice group, which also wants the government to build more housing.
The NSW Council of Social Service (NCOSS) says the state needs 5000 new social housing properties a year to keep up with demand.
However, removing stamp duty and imposing a land tax instead would improve housing affordability, it said in a report released on Monday.
The government should also introduce more protection for tenants to give the growing cohort of renters better security and stability, the NCOSS post-pandemic and disaster report on housing security says.
Renters were also four times more likely to be in housing stress (paying half their income or more) than homeowners.
About 3700 more people in NSW are homeless compared to pre-pandemic, threatening to cost the NSW economy as much as $2.5 billion over six years, the report found.
Indigenous Australians are over represented, comprising about 30 per cent of the state's specialist homeless services' clients.
Rental vacancies have plummeted while prices rise and the problem is particularly dire in regional areas.
Vacancies have dropped 72 per cent at Coffs Harbour on the north coast, while rents in the Central West, including popular centres such as Orange, Dubbo and Bathurst, have risen 30 per cent since March 2020.
NCOSS CEO Joanna Quilty says the findings show urgent action is needed.
"It is a disgrace that in Australia, a place that was once considered the lucky country, we have soaring rates of housing stress and homelessness while cost of living pressures continue to mount," she said.
The past two years of pandemic and disaster "have exposed the underlying failures of housing policy in NSW and across Australia", she said.
Community Housing Industry Association NSW CEO Mark Degotardi says there's an urgent need for more social and affordable housing stock.
"We need the NSW government to step up with us and confront the housing crisis," he said.
The NCOSS support for stamp duty reform will be welcome news for the NSW government as it seeks to introduce a new land tax option for first homebuyers in January, ahead of the March election.
The NSW government has budgeted more than $728 million to trial the scheme over four years.
However, the NCOSS recommendation for thousands of new social housing units to be built every year is further from fruition.
NSW has $300 million set aside in the budget to upgrade about 15,800 social homes to extend their life and make them more suitable for ageing and disabled residents.
Almost $150 million has been set aside for 200 new and 260 upgraded homes for Aboriginal housing.
A two-year pilot of a shared equity scheme for key workers and rezoning land for higher-density development are also part of the government's $2.8 billion housing strategy.
It includes $37 million for a program transitioning people sleeping rough into social housing with 120 new units.
Labor says the government has no mandate for its proposed trial of an optional land tax and should take the policy to the election.
