The Minns government’s signature policy to rewrite planning rules to ease the housing supply and affordability crisis overlooks a change that church and religious groups say could deliver 20,000 new homes in prime locations across Sydney.

The peak body representing churches, mosques, synagogue and other faith-based groups in the state says they have nearly 2500 parcels of land that could be redeveloped into residential accommodation that would help the government meet its ambitious new housing targets.