THE Lower Hunter's backyard sex industry is flourishing, with illegal brothels outnumbering licensed operators by up to four to one, lobby groups and counsellors claim.
Legal brothel owners and welfare workers say dozens of rented suburban rooms across the region are being used for illegal sex trade, increasing the risk of sexually transmitted disease.
And yet only one illegal brothel has been closed down in the past two years.
That is despite the State Government passing legislation in late 2007 to make it easier for local councils to act.
The Adult Business Association, which represents the licensed brothel industry, estimates that between 400 and 500 illegal brothels operate in NSW.
"That's a conservative estimate," association spokesman Chris Seage said.
The Newcastle local government area has 16 DA-approved brothels, Maitland has one and Port Stephens and Lake Macquarie have none.
Mr Seage said Newcastle's recent police crackdown on sex workers on the Islington "strip" was likely to have increased the number of home prostitution businesses in the region.
The most recent Centrelink fraud investigation data from 2007 reported 42 illegal sex operations in the Hunter.
"At that stage street prostitution was in full swing," Mr Seage said.
"Now it has been cleaned up it's quite conceivable that the figure would be higher."
The recent increase in gonorrhoea cases in the Hunter was partly attributable to unlicensed sex workers, he said.
"A lot of illegal operators have no regard for their own safety or clients," Mr Seage said.
"Legal brothels have to adhere to very strict guidelines. It's easy to rent a couple of rooms in a house but in the end everyone loses."
Newcastle City Council manager of compliance services Adam Gilligan said few complaints were received about illegal brothels compared with other land-use issues.
"In the majority of cases, complaints about unauthorised brothels are from other brothel operators," he said.
"It is rare for brothel complaints to relate to actual impacts on public health, safety or the environment."
A Lake Macquarie Council spokeswoman said only one complaint had been received over the past 12 months relating to a sex worker operating from a residence in Redhead.
The property was rented and the lease was not renewed upon expiry.
A former Maitland Road, Islington sex worker told The Herald she had no doubt the area's prostitutes were still active.
"Prohibition doesn't work. It just moves the problem to another place," Anna, who did not want to be identified, said.
"If the girls have been moved on they will just be working from somewhere else."