More land ready to be built on and a more diverse zoning is needed to ensure the region can meet a growing housing demand, says Dubbo MP Dugald Saunders.
But Dubbo mayor Ben Shields disagrees.
Mr Saunders says Dubbo is "getting pretty close" to a housing crisis with both renters and those looking to buy struggling to find a home.
He's called on councils, including Dubbo Regional Council to take action.
As well as councils releasing more residential land, Mr Saunders said a variety of housing options are needed to suit a range of people.
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"That means medium density housing in and around the CBD, townhouses, apartments duplexes, a different style of living, so that people who want to can not only afford something a bit smaller but those professionals that don't want a larger house actually have what they want," Mr Saunders said.
Without it, Mr Saunders said Dubbo was at risk of going backwards.
The Dubbo MP said at the weekend he was told about a teacher who was looking to move to the region and started to scope out the real estate situation with his wife and family. When they were unable to find suitable housing, the teacher was forced to reject the job.
However, Cr Shields - who admits we're in the middle of a "housing situation" - said Mr Saunders' ideas were too simplistic.
"There is so much land in the Dubbo area for construction that 14,500 lots are available. There are currently around just under 12,000 mailboxes in Dubbo. That means about 12,000 households," he said.
"We have got so much land available and ready to go, the situation is, that our builders and construction companies physically can't build fast enough. They will all tel you that they're run off their feet at the moment. That isn't as a result of Dubbo Regional Council not releasing land."
The mayor also pointed out the range of housing council had been approving.
"In December  we had our best ever December results for development applications. 46 houses were approved and then another 15 high-density residences like flats or duplexes," Cr Shields said.
"The stats and the facts do not back up what Dugald is saying. He either doesn't understand how the planning system works or its designed to shift blame onto local councils.
"I can't answer for what other councils are doing, I don't quite know, but here in Dubbo we are absolutely smashing it when it comes to planning approvals."
There's no doubt the population is increasing, says Mr Saunders.
"Part of the problem is that we've pushed really, really hard to get people to regional areas... and COVID has helped people realise they don't have to live on top of each other in the city," he said.
"They can move to a beautiful part of NSW, work remotely, maybe travel to the city occasionally for things. We always knew that would happen but COVID made it a reality.
"The risk is if we don't end up providing different types of housing we will end up losing some of the top people who want to move to our region. I don't want to see that."
Mr Saunders cited numerous state government initiatives that were already going to bring people to Dubbo, like the extra 150 employees who would be needed at Dubbo Hospital in the next year or the rail maintenance facility.
According to data from the Real Estate Institute of NSW, the rental vacancy rate in Dubbo in January was at 0.6 per cent. In September the city's rate was even lower at 0.3 per cent.
"That basically means there's nothing left," Mr Saunders said.
Regional Development Australia Orana also spoke about the issue at the recent 2021 Inland Growth Summit.
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