Ms Pavey, who this week visited a new social and affordable housing development in Glendale, said the government was "not involved" in the council-initiated plan to rezone part of Windale from low to medium-density, but admitted redevelopment was an option.

"If it's property close to services, close to transport, close to town centres, and the properties are not giving the best return to the government in terms of drain on revenues, we'd be crazy not to look at maximising opportunities for better social housing, for more affordable housing," she said.

"But there is nothing formal."

The Newcastle Herald last month revealed Windale residents' concerns about a "lack of transparency" from the government regarding the future of the 151 homes set to be rezoned.

After touring what she described as "the most exciting development I've seen since I've been housing minister" on Tuesday, Ms Pavey moved to reassure those residents.

"Show them photos of these properties," she said.

"We will look after people. And that is what we've done.

"We will not just kick people out.

"We are also very cognizant that people need to be near the community that they're familiar with, and we will show that respect.

"But we also need to ensure that we can mix it up with a mix of residences, and that means social housing [and] private, but we will always commit to putting at least the same number of social housing back in."

The Glendale development, by community housing provider Pacific Link, features 21 units.

Six have been bought back by the government as social housing, five are affordable housing and 10 private dwellings.

The apartments were built across three former social housing properties that featured decades-old free-standing homes.

Ms Pavey said the development was an example of how government housing would be provided in the future.

"It's using those assets, without draining further on the taxpayer, to utilise the benefit for everybody," she said.

"Don't be scared. We want to look at initiatives.

"I'm not putting a timeframe on [Windale], but if we can, we'd be crazy not to put fit-for-purpose buildings in that are better for the residents."