Lake Macquarie City Council has lodged a planning proposal to the NSW government to increase building height restrictions, allow subdivisions of less than 200 square metres in some areas and expand the boundaries of R3 medium density zones.

The proposal relates to 8000 lots across 28 different suburbs in the city.

If approved, the plan will implement the actions of the Lake Macquarie Housing Strategy adopted last year to address the housing shortage while avoiding urban sprawl.

Lake Macquarie City Council manager integrated Planning Wes Hain said the city's population was expected to grow by 28,000 people in the next 15 years.

"We're expecting to see demand for 13,500 new homes between now and 2036 across Lake Macquarie," he said.

"We know through previous surveys that people want greater housing options close to shops, jobs, schools and other services, but these options aren't currently available to meet demand. These changes aim to provide more diverse housing through infill development.

"These changes will unlock further opportunity for infill development close to our economic centres, with careful controls in place to ensure we don't compromise the character and amenity of our suburbs."

Council's Lake Macquarie Housing Preferences Study conducted in 2019 found 73 per cent of residents preferred single detached houses, but the current supply of this housing was 90 per cent. There was a reported 11.5 per cent preference for semi-detached housing, which made up 4.3 per cent of the supply.

"This demonstrates the demand for medium density styles of housing such as semi-detached housing, town houses and other housing choices," a council spokesperson said.

But the proposal has not garnered support from everyone. Cardiff resident Dave Byrnes said he understood there was a serious need for more affordable housing, but it should not be crammed into overpopulated areas without the necessary infrastructure.

"Hard decisions have to be made," he said. "We have to work out a way to get affordable housing and that's going to be tough.

"By the same token, people have to stop saying I want to live in Sydney or Newcastle. Maybe the government has to start looking at other areas like Armidale, Orange, Narooma that can be sustainably developed.

Sustainability was another issue he raised with the plan, saying there needed to be more consideration of space for solar, batteries and water runoff.

"The LMCC website has a whole page on sustainability with a picture of chickens in a backyard, you can't do that with medium density," he said.

In terms of infrastructure, he said the NBN couldn't handle the traffic as it is, and the Inner City Bypass extension was example of how infrastructure hadn't kept up with population growth.

"The first part of the inner city bypass that was in in 1987, more than 30 years later and we're only just thinking about completing it," he said.

Mr Byrnes said if the proposed house limits were introduced and a maximum height building was constructed next door to him, it would overshadow his solar panels as well as impinge on his privacy.

The council spokesperson said the proposed building height increases "are considered modest and unlikely to result in significant privacy impacts or shadowing of rooftop solar".

"Any potential impact on privacy and shadowing on a specific site will be considered and addressed when future applications are submitted for specific developments," the spokesperson said.

Council said new infrastructure was funded mainly by development contributions levied when new development occurs in an area.

Height limits are proposed to be increased to allow mainly for three storey development up to about 11 or 12 metres. Limits are also set to be increased by four metres in parts of Windale and six metres in one part of Charlestown.

Lake Macquarie councillor Kevin Baker has long pushed for changes to building height limits due to the number of development applications recommended for approval that exceed existing limits.

"What I've always said is council needs to be honest about its building height limits," he said.

"Council has never been honest about its building height limits because whenever one comes up that is above the building height limits, we will pretty much always have a recommendation from staff saying it should be approved.

"The problem is residents don't understand that. Residents don't necessarily see that when one comes up before us that this is the recommendation that's been given.

"Whenever we see one of these buildings that come through that is a 10, 15, 20 per cent variance, what we tend to see is objections from the community saying 'well it's above the building height, we can't possibly allow it'.

"And the staff response is always 'well the limit is actually just a guide'.

"They've said that because of this reason and this reason, and it's only half of the roof so therefore it's acceptable, whereas the community don't look at it as a guide, they look at it as a limit."

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