One site is at the corner of Gore and Edwards streets and the other spans 12 lots.

Minister for Water, Property and Housing Melinda Pavey said work at the Gore and Edwards street corner site is underway with Kempsey-based building company Lahey Constructions and a project management company Principle Project Management.

Four old fibro houses have been demolished to make way for the 16-unit development.

Mrs Pavey said the project showed what could be done with the right zoning, better density and common sense.

The site will be home to 10 two-bedroom and six one-bedroom units for social housing residents.

Port Macquarie MP Leslie Williams said it was a great outcome.

"Obviously it's no secret we do have a significant waiting list for public housing, not just in Port Macquarie, but across the state," she said.

"This is about having a look at the spaces we already have and how we can use them more efficiently in terms of addressing those wait-list issues."

Lahey Constructions project manager Bernard Pociask said the Gore/Edwards street project furthered the construction firm's relationship with the NSW Land and Housing Corporation.

There will be 60 people working on site at the peak of the construction project.

Meanwhile, the NSW Land and Housing Corporation has launched a registration of interest for builders, developers and community housing providers to put forward proposals to redevelop 12 sites in Port Macquarie.

The NSW Land and Housing Corporation-owned sites are bounded by Grant Street, Mowle Street, Gordon Street and Church Street.

The registration of interest opportunity says the NSW Land and Housing Corporation is open to considering different sale, development and leasehold structures, and innovative renewal solutions.

Mrs Pavey said it could be a mixed development with potentially rent-to-buy, the replacement of social housing and creating opportunities with affordable rent.

"Whilst if you are in the market currently, that's great news, if you are not, it's tough," she said.

Mrs Williams said the state government was going out to the market as part of the process.

"It might be some social housing, some affordable housing, maybe some rent-to-buy but we will have a look at what the expressions of interest look like, in the first instance," she said.

The registration of interest responses close on December 15.

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