Take the catastrophe first. Planning and Public Spaces Minister Paul Scully last week stuck with his decision to require 30 per cent social and affordable housing at Honeysuckle HQ. That's the site for which the former Liberal-National government planned a spectacular culmination of our decades-long harbour-side redevelopment.

It will be no such thing if extensive social and affordable housing is forced into it. Great-looking buildings with engaging ground-level facilities are expensive. No developer will build any at HQ if well-heeled buyers run a mile from the idea of sharing a building with nightmare neighbours.

Only a small minority of the mainly decent people in social or affordable housing match that description, but they're enough to make life a misery for everyone else.

Of course, no one wants to publicly discuss such politically incorrect things these days, but that's why the former government excluded HQ from its 30 per cent social-and-affordable-housing quota on crown land.

We have only one harbour and only one remaining site that can make the most of it, one that could have postcard-worthy buildings and bustling retail, food and beverage establishments. It's the only site through which the intended new core of the city centre around the interchange can connect with the water.

In all those years when development has crept westward along Honeysuckle Drive, this 3-hectare parcel of crown land between Cottage Creek and Hannell Street has been waiting to become Newcastle's Circular Quay.

Well, forget that. What we can now expect at Honeysuckle is not a set of eye-catching, beautiful buildings, like those that the state's Hunter and Central Coast Development Corporation has realistically depicted. Instead, developers will have to build mediocre, economical structures.

To get an idea of what to expect, just look at the average blocks of flats around town, those with plain, practical shapes and surfaces of cheap cladding or even unpainted concrete.

We don't easily cry over things we've never had, things that have only been promised to us, but this one is worth a quiet little sob in the corner.

The former government's plan attracted proposals from three top-notch national and even international developers, I hear. High-quality work in superb locations was their specialty, and, according to one industry source, they were the sort of organisations that really knew how to make retail, food and beverage spaces work.

I'm sorry that they wasted their time and money on Newcastle.

What a pity it is that the former government didn't get the contracts signed before it lost office a year ago.

The best we can hope for now is that the project will somehow stall and go into abeyance until a Liberal-National government is again elected and maybe overturns Mr Scully's decision. Don't bet on it, though.

The site is too good and won't be left empty for long.

The root of this problem, as usual in lousy planning in Newcastle, is short-term thinking.

Yes, the state has a severe shortage of housing, especially government-supported housing. That's the problem we have now.

But we also have a long-term future. Once we have passed up the chance to get the best out of this special parcel of land, the mistake won't be corrected for a century or more. For all practical purposes, we'll have lost a now-or-never chance to build a truly remarkable new city centre.

Mr Scully earnestly wants to address the housing shortage, and his HQ decision is backed by state member for Newcastle Tim Crakanthorp and Lord Mayor Nuatali Nelmes.

"I support all of the government's housing policies," Mr Crakanthorp said in response to questions.

"We are in a housing and homelessness crisis, with almost 2000 people in Newcastle on the social housing waitlist. Newcastle needs more social and affordable housing."

Yes, but not necessarily at HQ. It's a large parcel of land but only a tiny fraction of what the state owns in our city. The government could indeed buy more land, or subsidise additional affordable housing on private land, if it lifted the restriction on HQ and sold it for the resulting higher price.

The other decision that Mr Scully won't back down on is abolition of a fund that insured developers against excessive cost in grouting old city-centre mines. It was another Liberal-National policy aimed at supporting our redevelopment, a special solution to our special problem of having honeycombed ground.

Without it, a developer and its bank need to be brave or foolish in launching construction of a high-rise project whose cost can't be known until the last tonne of grout has been poured.

Faced with that risk, many or most projects just can't go ahead.

Again, Mr Scully has a reason for the policy: Labor is resolutely trying to control the debt and budget deficit it inherited.

But the cost of the fund has been trivial - an average of $220,000 a year, according to the latest figures. The state would surely collect more in stamp duty from the buildings that would be erected if it kept providing the insurance.

Notice that they'd be mostly residential buildings. So does Mr Scully want more housing or not?

Cr Nelmes and other councillors have called for the fund to be reinstated. But to the state government, it seems, revitalising Newcastle isn't worth even $220,000 a year.

And so the years pass and our old city centre remains semi-derelict.