The state's planning minister conceded on Friday that greenfield projects will continue to be built as the government simultaneously announced plans to fund a national park in the backyard of many of the developments.
Just shy of $80 million will be spent on a dedicated koala reserve to protect and restore up to 1830 hectares of habitat along the Georges River between Long Point and Appin in Sydney's southwest.
The area is also the site of ongoing development projects with 13,000 houses to be built in Appin and another 3300 proposed for Gilead, both sensitive parcels of land that include koala corridors.
Planning Minister Paul Scully said upon assuming office in March there were around 60,000 dwellings on greenfield sites in the development pipeline.
"Greenfield development on the urban fringes will continue because there is already a great deal of it in the system," he told the GWS Housing Summit on Friday, adding there are additional rezoning proposals that remain under consideration.
NSW Environment Minister Penny Sharpe also conceded the government is facing pressure to increase housing supply while protecting koala habitat.
"I am working closely with the planning minister, he has got a big job to do, and the government is committed to getting housing into the ground," Ms Sharpe told reporters in southwest Sydney on Friday.
"But we need to make sure we are balancing the importance of looking after koalas as well, and we think that we can do both."
The government's $80 million dollar investment is part of a wider $172 million pledged in the 2023-24 budget for the conservation of koalas in the wild.
The funding will provide $48 million to help establish the national park, $26 million to create koala-friendly crossings in the region and $5.7 million to look after local populations requiring care.
"Establishing a national park and putting more money into infrastructure to keep koalas safe around roads will ensure generations to come will still be able to see koalas in the wild," Ms Sharpe said.
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