The Minns government will build apartment blocks for Sydney's essential workers, offering them cheap rent so they're not priced out of the city.
Tuesday's budget will set aside $450 million to build more than 400 build-to-rent dwellings over the next three years.
The homes will be offered to workers like teachers, nurses, police officers and firefighters at a discount to the market rent.
Premier Chris Minns said the government was thinking "outside the square" to improve affordability.
"We're expecting big towers and they'll be exclusively for essential workers," Mr Minns said.
While the discounts haven't been decided, the premier suggested they would be close to 20 per cent.
"We can offer competitive rates because the government will own the land. It will be the builder of the project," he said.
"Any profits that come about as a result of the project will be reinvested so that we can potentially envisage stage two or stage three of this."
The government's development arm, Landcom, will acquire up to four sites for the apartment blocks.
The premier said an audit was underway to find suitable government land, including close to the city where affordability was at its worst.
"We're open to partnering with private landholders as well.
"It may be that we need to effectively enlarge our site … to get the foothold that we need to put up a big tower."
Frontline workers travelling long distances
The announcement was welcomed by paramedic Michael Hobson, who lives on the Central Coast but works at Artarmon.
"To be able to live closer to work [would be] incredible," Mr Hobson said.
"Twelve hours of a night shift and then driving home up a freeway can be quite detrimental to the safety of the workforce.
"I'm very much looking forward to this actually becoming a reality."
Another paramedic, Alexander Allen, said he'd moved back home to keep up with the cost of living.
He said rental discounts would make it easier for essential workers to live close to work.
"Even though 20 per cent discount is not the world's biggest discount… every little bit counts."
He said he hoped the government could reinvest any profits in more affordable housing.
"I'm of a belief that if we can help the most amount of frontline workers then that would be the ideal thing to do."
The government hasn't yet decided the eligibility criteria for the new homes, which are likely to be in hot demand.
"We want to work with unions … to ensure that we've got a scheme that's sustainable and fair," the premier said.
