Vision to turn vacant block in city's CBD into affordable housing

City of Newcastle is investigating the potential of the parcel of land it owns, known as Rail Bridge Row, which sits between King Street, Hunter Street and the foreshore.

Newcastle Lord mayor Nuatali Nelmes said the future of the site has not been determined yet but affordable housing is central to the discussions.

"With cost of living pressures exacerbating the housing stress being experienced by thousands of Novocastrians, increasing the supply of affordable housing in Newcastle is a key priority," she said.

"As part of our vision for the ongoing revitalisation of the CBD, a mixed-use development on this site could help ease the affordable housing shortage while supporting investment and creating more jobs in Newcastle."

The council has set itself a target to make 15 per cent of all housing affordable across the local government area.

NSW government data shows the number of people on the social housing waitlist has grown in Newcastle, Lake Macquarie East, Port Stephens and Raymond Terrace between June 30, 2022 and June 30, 2023.

The number of "priority" cases in those areas have also all increased.

The Hunter Street site was purchased by the council from Hunter and Central Coast Development Corporation in 2020.

The vision was to build a mixed-use development with opportunities for ground floor retail, affordable housing and commercial uses.

The 4,125 square metre lot at 280 Hunter Street stretches from Brown Street to near the intersection of Darby and Hunter Street, opposite the Crown Street light rail stop.

Investigations will also look at whether the site can better the city's active transport network.

Cr Nelmes said the council is working through various early design options and will start site assessments soon for early works and approvals to support development on the site.

She said the council will also explore potential partnership opportunities with community housing providers.

"We're committed to delivering safe, connected and convenient cycleways across the city," Cr Nelmes said.

"This site could also provide an opportunity to deliver an important east-west commuter cycleway connection, strengthening Newcastle's cycling infrastructure while enhancing the sustainability and livability of our city."

In May, City of Newcastle's affordable housing levy scheme came a step closer to fruition when its planning proposal received gateway determination.

The scheme would see a levy introduced on new developments which would be pooled to fund affordable housing through an approved provider.

Under the proposal, larger developments in Stockton, two areas of Broadmeadow and the western corridor including Minmi, Fletcher and Maryland would be subject to a 3.3 to 3.5 per cent contribution rate based on their size.

A 1 per cent contribution rate would also apply to all residential and mixed-use developments that result in an extra dwelling and more than 200 square metres of residential gross floor area in all other areas in the LGA.

Earlier this year, the state government lodged $13.5 million plans with the council to demolish buildings and remove trees at 190 Brunker Road to make way for a four-storey affordable housing building.

The 25-unit residential block is hoped to address the growing shortage of affordable housing in Newcastle.