Mayor Rick Firman said council identified a hole in the housing market for people who could not afford large builds but did not meet the requirements for social housing.

Council purchased the land in Apollo Place in 2018 and put out an expression of interest to developers who might have been able to assist and Argyle Housing responded.

"Councillors and senior staff have been working very hard to address our current housing shortage," said Mayor Firman.

"Council is delighted to be exploring a partnership with the reputable Argyle Housing. Together we will strive to work on suitable solutions, which will be done in a professional, considered and cost-effective manner."

Argyle Housing is a not-for-profit community housing provider that manage properties in 12 regional cities throughout the Southern and Western parts of NSW.

CEO Wendy Middleton said development will open up a lot of opportunities for a large portion of the community who may otherwise fall into the cracks.

Plans are currently being drawn up for a number of two-bedroom units which will meet accessibility requirements for people with mobility issues.

"With a development like this one, sales and rental prices of the properties will be 30% lower than market value, allowing lower income earners to access suitable housing based on eligibility requirements," said Ms Middleton.

"This covenant means the area can be developed and maintained to ensure that this niche in the market continues to be met and Council's vision to meet community needs is sustained."

"The proposed development will be rolled out in stages and is expected to begin within the next few months once details are confirmed."

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