A proposal to increase density around a number of Illawarra train stations has been labelled as "distressing" by residents and property groups have questioned whether the chosen stations are the right ones. Last week, a NSW government housing plan was accidentally published online. The plan, in development for months, targeted certain stations in the Illawarra, as well as Sydney and the Central Coast as Hunter as locations for increased housing density. In the Illawarra, this included Dapto, North Wollongong and Corrimal. While the plan was quickly removed from the government website, later in the week the NSW premier Chris Minns and planning minister Paul Scully released its plan to rezone land within 400 metres of certain railway stations to create 138,000 new homes. In these areas, residential flats will be permitted in all zonings. This applies to land within 400 metres of Corrimal, Dapto and North Wollongong train stations. Anne Marett, who with the Corrimal Community Action Group has called for better planning and more affordable housing in her suburb, said the enforced rezonings were "distressing". "The whole thing is a really distressing example of very poor urban planning," she said. "Corrimal Community Action Group hasn't been opposed to increase in the density of housing, what we want is integrated, good urban planning." Ms Marett said that existing services in Corrimal, including schools, medical services and open spaces needed to be considered when the area was earmarked for additional housing. "It's not so much about the location of the station, but it's about the service at the station. We've got trains stopping there hourly during the week and even less frequently at the weekend," she said. "And the bus services are much worse." The other sites named in the government's plan may be inappropriate for additional housing development, Property Council Illawarra regional director David White said. "The sites identified are not logically distributed across the Illawarra; there are several sites with latent transport capacity that have been overlooked," he said. A report prepared for the Property Council in 2018 identified housing adjacent to Austinmer, Bulli, Kiama, Oak Flats, Thirroul, Towradgi and Woonona stations as ripe for increased heights. Mr White said Dapto and North Wollongong were not the right location for additional housing, as in Dapto's case, a large amount of land is susceptible to flood, and in North Wollongong, there are key employment lands that should be retained and not turned into housing. "We have an opportunity to deliver more housing, more quickly and we would encourage the NSW Government to re-examine the program scope in the Illawarra to deliver more housing for a growing and diverse population," Mr White said. One unintended consequence of the plan would be to raise property values close to the identified stations. Real estate figures told the Mercury last week that developers may be eyeing lots close to stations, but if the experience of northwest Sydney is anything to go by, such an outcome is an absolute certainty. When the Metro North West Line was constructed in Sydney, extending the Epping to Chatswood line to the rapidly growing areas of north west Sydney, house prices in suburbs along the line grew at more than triple the national average. Lucky home-owners in the vicinity of train stations suddenly saw their properties increase by millions of dollars in value. A similar dynamic could play out in the Illawarra if residential properties around stations are rezoned for increased density. There have long been calls for a system of "value capture' which levvies the increases in property values to fund infrastructure, whether through a land-tax system, infrastructure contributions or giving residents and developers the right to "buy" the increased heights. However these were rarely implemented in NSW, outside of key station precincts such as the Sydney City and Southwest Metro project, where the government was able to recoup around a billion dollars from developers at stations at Waterloo, Pitt Street and Victoria Cross - in North Sydney. Transport expert Martin Locke from the University of Sydney said it was unlikely that such a scheme would be rolled out in the Illawarra. "The feasibility of trying to capture that uplift in value is very, very hard," he said. "I've looked at this debate over the last 10 years, and I must admit, it's gone around in circles." Overseas, there has been more success with value capture, with metro systems in Hong Kong largely financed by new urban development at the stations and London's Elizabeth line recouping about a third of the cost through levvies on businesses along the line. Notwithstanding these examples, other groups have also cautioned against specific taxes to fund particular projects, with the Grattan Institute in 2017 saying governments should instead focus on introducing broad requirements that apply to a range of projects. Mr Locke said for the scheme to work, densities of 20-30 storeys would be needed, and even then there were challenges. "It is very challenging to come up with a scheme that everybody thinks is going to be fair, and it's very easy for the politicians to put it in the too hard basket," he said. "In the Illawarra, it'll definitely go straight into the too hard basket."