The New South Wales government has scrapped plans to redevelop a controversial inner-Sydney public housing block, but will push ahead with another one, amid ongoing protests.

Labor announced it would abandon plans to turn the Franklyn Street estate in Glebe into a mix of 425 public and private dwellings, saying the additional 22 social housing dwellings was not enough to justify the redevelopment.

Instead, the government is refurbishing 35 vacant properties in Glebe and offering them to social housing applicants, and redeveloping a public housing site at Wentworth Park Road, increasing it from 17 to 43 dwellings.

Residents and social housing activists have spent the past week occupying the premises and demanding no demolition.

NSW Housing Minister Rose Jackson said the Wentworth Park Road site would remain publicly owned, and existing tenants would be offered temporary housing while it was redeveloped.

“We are extremely mindful of the fact that existing residents there want assurances that they will be rehoused in the local community, but also that they will have a right of return,” Ms Jackson said.

“We know that communication has not been great, we know that there has been uncertainty, mixed messages. We acknowledge that failure and are giving a clear commitment to work with them through every step of the way.”

Tens of thousands still waiting for public housing 

Demand for social and affordable housing has increased significantly. There are more than 57,000 applicants on the list for social housing, where people can expect to wait between five and 10 years.

Kat Miranda — who has been on the priority waiting list for public housing for two years — was living in her car up until recently, when she moved into transitional accommodation which she will need to vacate later this year.

She said the increase in social housing dwellings in Glebe was a good start.

“If I had stable accommodation, my life could be great but at the moment it’s just very insecure and depressing.”

Housing advocates say Glebe a good start

Some advocacy groups such as the NSW Council of Social Service (NCOSS) have been calling for the NSW government to build 5,000 additional social housing dwellings every year for the next 10 years.

Shelter NSW chief executive John Engler said while there was a long way to go, he was pleased to see the government dealing with controversial housing developments “sensitively”.

“To preserve a community in Franklyn Street, that estate made up of well over a hundred properties and homes for people, that community is very pleased by this decision,” Mr Engler said.

“The decision of Wentworth Park Street which will allow existing tenants to move back … even just the 50 or so families or households that might be housed as a result of this today, we need another roughly 999 of those.

“So before today’s announcement, we might have said what we need is in the thousands. As of today it’s now in the hundreds. We’ve certainly left the blocks, we’re off and running, and looking forward to hearing more announcements like this.

Ms Jackson also acknowledged the social housing waitlist was growing and causing anxiety across the state.

“We absolutely hear that the community is incredibly concerned, distressed, frustrated about what’s happening in the housing market here in New South Wales,” she said.

“We are doing everything we can at the state level to make sure we’re bringing more properties back online. Today it’s Glebe. This is just one suburb, but we will take every single opportunity, suburb by suburb, across Sydney and across New South Wales to deliver more public housing.”

Across the city at Sydney Town Hall, a rally was held today with people demanding more public housing action and protection, including for the Wentworth Park Road site.