In a bid to tackle the state's growing housing shortage, the NSW government announced on Monday it would be spending about $500 million unlocking land and accelerating housing infrastructure.

The funding includes $300 million to co-fund and speed up shovel-ready infrastructure projects and $89 million to create faster planning assessments.

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The Riverina has been at the forefront of the national housing crisis and local builder Wayne Carter said not enough homes are being constructed to meet the increasing demand.

He said this was partially due to the processes for rezoning land and building homes becoming overloaded with complex requirements and additional costs.

"It is a painful process and the paperwork is horrendous now," Mr Carter said. "If you're not up to speed on doing a development application (DA) you wouldn't have a clue how to manage the process."

The builder said he welcomed the $500 million commitment from the state government, but only if they ensured it was spent in the right channels.

"I'd like to see them spend it on getting rid of the bureaucratic red tape and the study after study which are hampering movement within the developers industry," Mr Carter said.

"Because right now developers see all these added costs and it just takes the wind out of their sails."

This sentiment was shared by fellow builder Matt Jenkins, who said the number of steps to complete a Wagga development seemed to keep increasing.

"To go from paddock to grader can take you five years now," he said. "There's too much red tape and we've got a housing shortage with so much demand."

Wagga mayor Dallas Tout was interested to see how much of the funding would be set aside for regional areas.

He said the funds, especially those dedicated to simplifying the planning process, were desperately needed in Wagga.

"Anything that can open up the planning assessments and the pipeline for housing is critical because right now we're stuck and hammered in the pipeline," Cr Tout said.

"It's especially crucial because at the moment with the growth and the infrastructure projects that are coming to Wagga the housing crisis is going to get worse before it gets any better."

The NSW government believes the $500 million boost will drastically increase the number of homes being built across the state.

Treasurer Matt Kean said the planning system being strengthened would help builders meet the growing needs of the community.

"Prioritising planning assessments for new homes will make it faster for high quality planning proposals to be approved," Mr Kean said.

"We are anticipating hundreds of thousands of homes will be delivered sooner, through faster state and local rezonings and approvals."

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