Some accommodation for homeless people in NSW will be outsourced to non-government organisations.
The NSW government says it will redirect about $10 million it had been spending on motels and caravan parks in contracts to NGOs.
"We recognise that many people experiencing homelessness have complex needs and need more than a roof over their head and that is why we invited the NGO sector to provide accommodation in place of motels," Social Housing Minister Pru Goward said in an announcement of 10 contracts awarded to non-government partners.
The providers will offer accommodation services in Sydney, southeastern Sydney and northern Sydney as well as on the Central Coast and the Hunter region at properties that are leased, underused or provided by charitable organisations.
The state opposition criticised the government for "developing its housing policy based on postcode" and said the move meant families in Sydney's west and southwest would continue to be accommodated in caravan parks and motels.
"There have been significant increases in homelessness in Sydney's west and southwest yet the NSW government thinks having a two-tiered system is a good idea," Labor social housing spokeswoman Tania Mihailuk said.