Tweed hospital redevelopment to deliver 800 new homes, but affordable housing concerns remain

A master plan unveiled by the NSW government for the former Tweed Hospital site in northern New South Wales will transform the prime waterfront real estate into 800 high-density housing units. The redevelopment aims to address the "dire need" for housing in Tweed Heads, a community experiencing rapid growth that has strained local rental and housing markets, evidenced by a vacancy rate of just 0.8 percent.

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We certainly welcome this commitment by the state government to get housing onto that site. It's prime real estate in Tweed Heads, so to get a residential outcome is a great one.

Tweed Mayor Chris Cherry welcomed the creation of more homes but expressed a desire for a greater commitment to affordable housing. She urged the state government to increase the allocation beyond the planned 10 percent, stating, "Eighty units will help, but more is always better." Cherry highlighted the site's suitability for affordable and key-worker housing, emphasizing that "it's ideal for affordable housing and getting some of that low-cost, key-worker housing that we really need in the shire."

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It's ideal for affordable housing and getting some of that low-cost, key-worker housing that we really need in the shire.

Landcom, the developer, confirmed that planning is in its early stages but committed to at least 10 percent affordable housing. Andrew Cooper, executive general manager of Landcom's built form division, explained the financial realities, noting, "Unfortunately, affordable housing has negative land value. That's just the nature of the costs in 2026. You need the market housing to effectively support the affordable housing." He stressed the need for a mix of housing types to ensure the development's viability.

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Eighty units will help, but more is always better.

However, Teresa Mitchell, founding director and CEO of AGAPE Outreach, voiced disappointment regarding the absence of social housing in the development. "The fact that there's no social housing is kind of sad," she stated, pointing out the needs of various vulnerable groups, including sole parent pensioners, people on disability payments, and youth. Mitchell argued that the current plan "is just not going to cater for the people who live here."

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Unfortunately, affordable housing has negative land value. That's just the nature of the costs in 2026. You need the market housing to effectively support the affordable housing.