The slow pace of development in regional New South Wales has exacerbated pressure on housing and rental affordability and heightened during the COVID-19 pandemic, an independent review has found. 

The Regional Housing Taskforce delivered its findings to the NSW government today after hosting more than 500 online meetings.

Residential rental vacancy rates across regional NSW remain below two per cent, with areas such as the Central West sitting at 0.3 per cent. 

Taskforce chair Garry Fielding said while its clear planning processes need to speed up, the report found there was "ample lands" zoned residential, contrary to what might have been first thought.

"The availability of zone residential lands isn't a major issue," Mr Fielding said.

Mr Fielding said the pace in creating small density housing in and around town centres was also a setback.

"Medium density housing for older people and small households is certainly an issue," he said.

"Regional communities recognise the need for more diverse and affordable housing."

But Mr Fielding said there has been some strong community opposition towards medium density housing.

"Our take-home is there really needs to be better approaches to infrastructure planning and delivery and coordination to improve regional housing supply."

Higher density housing needed 

Shoalhaven Council was one of the first in NSW to develop an affordable housing strategy.

A number of housing projects are underway across the region which will mean more affordable options for people.

This includes the Nowra central business district where council is looking at building higher density apartments rather than encroaching on green spaces.

Council's city futures director Gordon Clarke said the regional housing taskforce was embraced by council and hoped its findings would help address the challenges faced by the Shoalhaven in the affordable housing space.

"As the demographic profile changes there will be a need for different housing products in different locations, and this is one of the findings that has come out of the report," he said.

A growing concern

Coffs Harbour is one regional community faced with low availability of affordable rentals and an ageing population, according to local planning manager Sharon Smith.

Ms Smith said residential vacancy rates are now less than one per cent.

"It is hard to get a house, and expensive to pay for it," she said.

"We've also identified our population is getting older and we're going to end up with couples without dependents."

She said there will be more than 30 per cent single family households as the population ages. 

"So we're needing to roll out a more diverse product around our LGA to allow people who want to downsize," Ms Smith said.

Waiting list for housing increases

The CEO of Shelter NSW, John Engeler, said the lack of housing supply in regional communities has been "exacerbated" by the pandemic.

"COVID has sped up the need for a regional housing response," Mr Engeler said.

"The waiting list went from a few hundred to a few thousand.

"This is no longer desirable. It's an essential area of urgent government response."

He said a targeted approach and quick government action to address the housing crisis was needed. 

"Our response that might be required in Northern NSW is very different to what is needed in Bega or across the divide," Mr Engeler said.

The Regional Housing Taskforce will now prepare recommendations for the NSW government to consider in October.