When a state government plans a new rail line, one might imagine the views of the transport department and the treasury would be telling in how the line will work.

But not in Sydney these days. In 2016, the city's pressing need for affordable homes is squeezing other concerns to the margins.

When the Baird government's Cabinet Infrastructure Committee met in late December to decide the route of the $10 billion metro line through central Sydney, the seven ministers present were armed with the advice of their departments.

The Treasurer, Gladys Berejiklian, the Transport Minister, Andrew Constance, and the Roads Minister, Duncan Gay, were of one view. They thought the line should run west of Redfern Station and include a stop at Sydney University.

A Sydney University stop would be used by many more people than the other option, a stop further east at Waterloo. More passengers would help ensure a better financial return for the project.

Health Minister Jillian Skinner also backed Sydney University. A stop there would be the closest rail station to Royal Prince Alfred Hospital.

But lined up against these four were two ministers with housing responsibilities.

UrbanGrowth NSW, the development agency under the responsibility of Planning Minister Rob Stokes, had made no secret of its desire to build thousands of new apartments around a Waterloo stop.

The Social Housing Minister, Brad Hazzard, was also at the meeting. He could see how new apartments at Waterloo could pay for the reconstruction of 2000 existing dwellings in the area.

And Stokes and Hazzard had the support of the Deputy Premier and Police Minister, Troy Grant, who reflected the cops' enthusiasm for dismantling the Waterloo towers.

The eighth vote and the premier's prerogative, then, was Mike Baird's.

And, according to multiple people in the room, it was the opportunity to rebuild the estate at Waterloo that swayed the premier's decision.

A better way for kids to grow up

"Social housing, it wasn't - inverted commas – 'social housing' when we were placed there," says Joanna Loko.

Loko, a single mother, raised her four children for over 10 years at the housing estate at Claymore near Campbelltown, one of the Sydney's most disadvantaged areas.

"I looked at it as a home for me and my children," says Loko. "It was a roof over our heads, and as a family you just make it a home. We were housed by government housing but that didn't define who we were – it didn't," she says.

Loko grasped the opportunities around her. She volunteered. Through groups such as St Vincent de Paul, Kalon House of Welcome, and the Campbelltown Animation Project, Loko, who credits her church and her own mother for the support she needed, became a presence in the community.

She found paid work in a laundromat and coffee-shop she helped establish around Claymore. And she was able to gain TAFE qualifications while raising her kids, in no small part because of the sense of financial stability.

"There's no pressure on your rent," she says. "You are able to manage because you are able to budget around it."

But it was her experience in the years after moving out of Claymore, which she did to make it easier to take her sons to sport, that underscores the scale of the housing crisis in Sydney, and why government policy is desperately trying to catch up.

On Sunday, the Social Housing Minister Hazzard announced the government's long-awaited policy on the future of the sector.

Under the policy, not-for-profit providers would take over the management of a greater proportion of social housing.

There's a financial motive here: the transfer allows tenants access to Commonwealth rent assistance – worth more than $635 million over the next 10 years.

But Hazzard's policy also promised 17,000 existing social housing dwellings would be rebuilt in the next  10 years, and an extra 6000 dwellings created.

To pay for those dwellings, developers will be given the chance to build apartments for private sale on public estates.

For Hazzard, the policy has a dual benefit: it raises money to pay for construction, and it changes the character of public estates.

"The major plus of all this which is not necessarily given enough focus is that when you get a mixture of housing, private and public, you get an incredible drop in anti-social behaviour," says Hazzard.

"Also what appeals to me is that little kids growing up don't just see their parents and grandparents not going to work," he says. "They see people around them dressed for work, leaving home to go about their day, and they think 'Gee whiz that's what I can do.'"

When Hazzard addressed a meeting of housing providers on Wednesday to discuss the changes, however, a theme immediately started to emerge.

At one level, housing advocates appreciated Hazzard's apparent and refreshing concern for the sector.

But at the same time, they wanted to know what the government was going to do to create more affordable properties – for people, like Loko, who might move out of social housing but who would struggle in Sydney's exorbitant rental market.

"I just don't think that's enough at this stage," said Charles Northcote from BlueCHP housing of the 6000 promised extra dwellings.

Magnus Linder from Churches Housing cited UrbanGrowth projects such as the Central to Eveleigh Development and the Bays Precinct that currently have no specified level of affordable housing: "I'm wondering if we are not letting an opportunity go by," he said.

Wendy Hayhurst, the chief executive of the NSW Federation of Housing Associations, cited research showing at least 30,000 new affordable dwellings were needed in Sydney: "There is an affordability crisis out there," she said.

And almost identical concerns were voiced by Shelter NSW's Mary Jenkins ("For this to work we need to actually work out how to grow the affordable section of the private rental market); Andrea Galloway from Evolve Housing ("there has to be some sort of pathway to take people through, and I don't see that in the policy"); and Melissa Brooks from Address Housing ("What we find in transitioning tenants to the private market is that there is a real and well-founded fear about the lack of security in the private market.")

In the years since Loko lived at Claymore, this insecurity has been real.

"We've moved – I don't know how many times we've moved," she says. A few years ago, after her oldest three children moved out of home, she stopped working because of health concerns.

"My youngest daughter and I became homeless, because of the rent," she says. "So we got into Mission Australia housing."

She is now working again, for an agency that provides disability carers. But she still does not earn enough for her own place. She's been living with her oldest son and his family since last year.

Hazzard says he is aware of the need for more affordable housing, and views the 6000 new dwellings as a minimum.

"To be aiming for thousands of new homes is almost a new lexicon for the sector," he says. "I think people have been very pleasantly surprised that a Liberal government wants to deliver on this – we are quite passionate about it.

"But to get thousands of new homes … this is only the starting point, it's not the finish point. I've spoken again to the Minister for Planning again today and indicated we need to really pin down some key directions as to where the community and business sector would find it acceptable to look at the development of private housing."

The Baird government might be redirecting train lines and knocking down unit blocks. But there might have to be plenty more to come.