Car parks in Sydney's inner ring are being eyed off in a bid to find any land that could be repurposed to build much-needed affordable homes.

Sydney's Inner West Council is set to convert four of its car parks into 200 affordable homes for essential workers, more than doubling the existing affordable stock.

The inner west has just 94 affordable homes, according to the Community Housing Association NSW.

The council will consider three shortlisted car park sites at its meeting on November 12.

Under the plan, three car parks from either Dulwich Hill, Leichhardt, Marrickville, Petersham or Rozelle would be turned into 200 affordable housing properties, along with the council's Hay Street car park in Leichhardt.

Inner West Council Mayor Darcy Bryne said the council was finding that essential service workers like teachers, police and ambulance workers could not afford to live in the inner west.

"We think that by using our public assets, in this case, car parks and depots to be repurposed as a different public asset, housing, to meet the crisis, we can make a real difference. This is a way that councils across New South Wales can contribute real solutions to the housing crisis," he said.

The council would keep ownership of the land and the homes will be built and managed by a community housing provider.

Mixed community response on affordable housing versus car parks

Councillor Byrne said the goal was to replace the car parking that would be lost but how that would be achieved would depend on the development assessment process.

"The feedback that we're getting from the community is they want to see council take every action we can to address the housing crisis, because families are being divided and young people are being forced away, and that means we lose what's best about the inner west."

Inner west local Jamie Comer thought more affordable housing was needed in the area.

"I mean you've got to make things a little bit more dense. It's just the way the future is going, building up, and hopefully they'll replace the car park somehow," he said.

Nick Easdown was strongly in favour of more affordable housing.

Gay Williams said affordable housing had "got to be a good thing".

"But it depends where, because if the car parks are in somewhere that's like a shopping centre, then no," she said.

Essential workers pushed to the outer suburbs of Sydney

The Inner West Council defines essential workers eligible for their affordable housing as workers in health, childcare, teaching, emergency services like police and ambulance, transport, retail, labouring, manufacturing and hospitality.

They need to earn from less than $61,322 or up to $145,811, depending on the household composition.

Research by the University of Sydney on 2021 census data showed that more than 52,000 essential workers were experiencing housing stress.

Catherine Gilbert, a lecturer in urbanism at the University of Sydney who did the analysis, said essential workers were being pushed out to the metropolitan fringe and beyond, to the Illawarra and Central Coast.

"There's now essentially nowhere within the metropolitan region where, say, an early career enrolled nurse could afford to rent even a one bedroom unit, and there's nowhere that even a registered nurse at mid career stage could afford to buy a strata titled unit," she said.

The analysis showed that there were only 13 of 33 local government areas in Greater Sydney that were affordable for a registered nurse to rent a two-bedroom flat at the median rent.

For registered nurses wanting to buy a flat at the median price, there were no areas that were affordable.

Ms Gilbert said that for occupations like policing and teaching, being embedded in their community was essential.

"That's particularly the case in essential services where workers have to be on call, so they need to live proximate to work, so they can respond to emergency situations, spikes in service demand."

'Years and years' to deliver affordable housing

Using public land removes one of the main barriers to building affordable housing — the cost of the land.

The Inner West Council announced back in 2015 that it would turn its Hay Street car park in Leichhardt into affordable housing, but the first brick is yet to be laid.

A spokesperson for the council said the council did not have the capability, expertise or funds to build the development on their own.

It has an agreement with community housing provider Link Wentworth to develop the site for affordable housing.

Nicole Woodrow, chief growth and innovation officer for Link Wentworth, said engaging with councils to build affordable housing was complex.

Tax issues, local planning, nimbyism and labour shortages all contributed to delays, she said.

"You can't just go in there and and do something in a year. You know, it takes years to do, to get approvals, takes years to actually build stuff. It's years and years," she said.

Funding for affordable housing is available from the NSW government's social and affordable housing fund, and Ms Woodrow said the Federal government's $10 billion Housing Australia Future Fund had opened up another funding source.

Ms Woodrow is enthusiastic about the Inner West Council's plan to use its car parks for affordable housing.