By Anne Davies and Matt O'Sullivan
Public housing towers in Waterloo will be bulldozed as part of a major urban renewal project over the next 20 years to accommodate 30,000 extra residents in 10,000 new dwellings around a railway station.
The redevelopment is one of the most ambitious in Sydney's history, rivalling Green Square, which is undergoing a transformation on industrial land a little to the east of Waterloo.
Announcing the plan, Premier Mike Baird said 13 hectares of land owned by the government and mainly used for public housing would be turned into a mixed-housing precinct with 10,000 dwellings. About a third will be for social and affordable housing, and the rest available for private dwellings.
The entire development will eventually cover about 40 hectares. Private landowners within an 800-metre radius of the proposed new Waterloo station, which will form part of the Sydney metro line, are likely to see their land rezoned for high and medium density.
UrbanGrowth had been pushing for the new metro station to be located at Waterloo.
This is likely to include the light industrial area along Botany Road and around McEvoy Street.
But landowners who find their properties rezoned for high rise can expect to pay a "value capture fee", which will be used to help pay for the public transport.
Mr Baird denied the project would result in the gentrification of the area at the expense of public housing tenants and pledged that there would be no loss of social housing from the current 2000 dwellings.
"Every single tenant will have the right to come back," he said, adding that efforts will be made to accommodate them in the area during the redevelopment.
An artist's impression of the planned metro train station at Waterloo.
Fairfax Media understands the government plans to begin the rebuild in areas with lower densities, such as the three-storey walk-ups, and replace them with higher density accommodation – before demolishing the two 30-storey towers in the Waterloo housing estate where 4000 social housing tenants live in blocks between Wellington and Phillip streets.
The housing estate dates back to the 1950s and includes four 16-storey buildings, and a large number of two- and three-storey blocks owned by the state's Land and Housing Corporation.
The area will become about a third social and "affordable housing" and two-thirds private dwellings.
The exact site for the train station within the precinct has yet to be determined.
The selection of Waterloo dashes the ambitions of Sydney University for a new station to be built on its campus.
While Sydney University had considerably more commuters, Mr Baird said the government had favoured Waterloo because a new station offered a chance to revitalise the suburb.
An environmental impact statement for the new metro station is expected to be released in the middle of next year, and construction is due to begin in early 2018.
Social Housing Minister Brad Hazzard said some residents of the housing estate at Waterloo would need to move to nearby accommodation but many would be able to relocate to new social housing as the redevelopment progresses in stages over the next two decades.
"I can assure Waterloo tenants that if they want to remain in Waterloo after the redevelopment, they can do so," he said. "It will be done in a calm and considered way."
The first relocations are expected to occur in the middle of 2017. About 9 per cent of the properties at the housing estate have new tenants each year.
The location of the new train station is the final major piece of the second stage of the Sydney metro line between Chatswood and Sydenham via the CBD.
While the Airport Line runs under Waterloo to the CBD, Transport Minister Andrew Constance said it would have been "too costly and very disruptive" to build a new station for an existing underground line.
Sydney University had made a concerted effort for a station for the metro line to be constructed on its campus, proposing a $1.5 billion "knowledge hub" comprising retail stores, offices and research facilities.
However, the government's property arm, UrbanGrowth, pushed for a new station at Waterloo.
Troy Daly, program director of Central to Eveleigh for Urban Growth, said the planning and design of the project would be highly collaborative.
"We want this to be an example of smart city planning," he said. "It will be an area where the choice is not to have a car because the transport and services are so good. It will be one of the most walkable areas in Sydney."
Construction of new buildings is not expected to begin until 2018.
Once the planning is complete, it is likely the area will be split up into 20 or so super-blocks, which would then be put to tender for the private sector to redevelop.
Greens transport spokeswoman Mehreen Faruqi said the government should not be using the Sydney metro line as an excuse to overdevelop the area.
"Population is set to grow by tens of thousands around this area, and we need to make transport decisions and build transport connections based on people's needs, not on the interests of property developers," she said.
Developer group Urban Taskforce said Waterloo was the right location for the station but it was concerned that the government had proposed a contribution tax of $20,000 for each new apartment.
"Any further taxing of new homes will be passed directly onto new purchasers," the group's chief executive, Chris Johnson, said.