Lismore City Council will enter a memorandum of understanding with Landcom and the NSW Department of Communities and Justice to build more affordable housing on Council-owned land in Lismore.
Under the proposal, up to 24 units could be built at 44 Bristol Circuit in Goonellabah, and 40 units at 69 Cynthia Wilson Drive.
Lismore City Deputy Mayor Jeri Hall said the two projects would go some way to easing the housing crisis in Lismore, particularly after the February natural disaster.
"This is a great outcome for our community. Housing was unaffordable in Lismore before the natural disaster and has only become worse since," she said.
"These partnerships with Landcom and the Department of Community and Justice ensures once these units are built, they will remain as low-cost housing in perpetuity."
Lismore State MP Janelle Saffin thanked Lismore City Council for making the development possible.
"This affordable housing project is something I have championed since last year when I brought then Landcom Chief John Brogden to our region. It's fantastic to see my advocacy pay off," she said.
"I thank Lismore Council and the team for stumping up the land to make this possible."
Minister for Families and Communities Natasha Maclaren-Jones said the project will help ease housing pressures for people at risk of homelessness in Lismore.
"Delivering affordable housing is one way to unlock a range of services which allow people greater access to secure housing and at the same time helps them live more independently," she said.
"Greater access to housing and support pave the way for people who are homeless or at risk of homelessness to secure a brighter future."
On the Bristol Circuit site, it is proposed Council will provide a 50-year lease and contribute up to $2.5 million it has already received from a Federal Government Building Better Cities grant.
On the Cynthia Wilson Drive, it is proposed that Council contributes the land and the Department of Community and Justice contributes $5 million to allow the development to go ahead.
Under the MOU, Landcom would act as project managers, with the housing owned and managed by a yet-to-be appointed Community Housing Provider. This ensures Council has no ongoing maintenance, property management or asset replacement costs.
This will also allow the Community Housing Provider to use the new developments as collateral to new funding for more affordable housing projects.
