The state's stretched housing sector will come under even more pressure over the next five years as people with disabilities enter the rental market under an NDIS goal which encourages independent living.
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The National Disability Insurance Agency, which administers the NDIS, estimates up to 122,000 people with disabilities will need housing by 2020.
About 40,000 people with disabilities in NSW are expected to seek affordable and accessible housing once they transition to the NDIS.
Figures released by the NSW government last week show there are more than 59,000 applicants waiting for social housing.
Community housing providers estimate at least 100,000 affordable properties are needed to meet the demand of NSW families on low to moderate incomes.
Caroline Cuddihy, chief executive of disability service provider Sunnyfield, described the lack of affordable and accessible housing for people with a disability as a potential stumbling block for the success of the $22 billion NDIS.
"It is a huge issue," she said. "Up to 122,000 people with disabilities will be looking for housing and at the moment there is really nowhere for them to live."
A person on a disability support pension of $434 per week would be able to pay $130 in weekly rent to keep them under the rental stress threshold of 30 per cent of income.
Wendy Hayhurst, chief executive of the NSW Federation of Housing Associations, said people with disabilities could be locked out of the private rental market, putting more pressure on the social and affordable sector.
"There are large number of people with disabilities who are living in accommodation which is not ideal," she said.
"Some of them are in large centres, others are living at home with ageing parents. There is no provision for them because the system is already overloaded.
"A lot of existing public housing is not suitable for people with disabilities. You can't put them in a tower block in the middle of nowhere."
Every Australian Counts, a public campaign to advocate for people with disabilities, is urging state and federal governments to act immediately given the long lead time required for new housing.
"The ministers made it clear that NDIS funding will be used to support existing specialist disability accommodation, and to build new and innovative disability housing," national campaign director John Della Bosca said.
"Every Australian Counts wants more detail on how this will be achieved including targets, timelines and guaranteed funding allocations."
NSW shadow minister for disability Sophie Cotsis called on the state government to introduce a co-ordinated plan for accommodation.
"There should be a plan to increase the supply of affordable housing options for people with disability, and this plan should roll-out alongside the NDIS over the next two years," she said.,
NSW disability minister John Ajaka said the State was working with the Commonwealth on a model to fund accommodation under the NDIS.
"The NSW Government is working on a range of innovative options to grow the range of housing available to people as the NDIS rolls out across the state," he said.
We are currently working with the Commonwealth and other states to finalise a model to fund specialist disability accommodation under the NDIS
The National Disability Strategy recommends appointing a national housing minister, unlocking government-owned land and making modifications to rental properties easier.
While the NDIS only covers supports for people with disability, the NDIA will have access to a $700 million fund to stimulate housing development when the scheme is fully rolled out.
