How do we solve Tamworth's housing crisis?

That's the consensus at the Business NSW regional leadership summit according to the peak industry body's executive director David Harding.

The major goal for the summit on Wednesday morning was to bring people together from industry, local government, and non-profits to come up with what Mr Harding described as "real, practical solutions" to the "frankly inhuman" housing crisis plaguing our region.

"We need to build more than a million homes in Australia, right now, and if we did it the traditional way we would need the labour of another entire nation to build them for us," Mr Harding said.

Solutions proposed ranged from building "efficient and affordable" modular houses to using artificial intelligence to speed up planning and approvals.

Here are some of the solutions discussed.

Homes North Community Housing CEO Maree McKenzie said the crisis was hitting the most vulnerable members of our population the hardest, so that's where we should start.

"We need more affordable housing, full stop, right now. In Tamworth on any given night we've got 70 people in crisis accommodation," Ms McKenzie said.

"People cannot afford our market rates. People who earn salaries, wages, in your businesses, are spending more than 50 per cent of their income to keep a roof over their head."

She pointed to the federal government's Housing Australia Future Fund as a "good start" but said the issue would only be resolved with a sustained, long-term pipeline of funding for subsidised housing developments.

"We need to re-think housing away from individual wealth creation. Since negative gearing, capital gains, and all those changes from the '90s changed the nature of housing, and not to the betterment of our nation," Ms McKenzie said to the Leader after the conference.

Tamworth Regional Council general manager Paul Bennett called on local councils across the state to "be brave" and take a more active role in housing as they used to in the mid-1900s.

"You go back to after the Second World War, and local authorities were building houses and providing housing advances and all sorts of things," Paul Bennett said.

"In 1993 that all sort of changed and councils essentially divested from anything to do with building and providing homes."

Mr Bennett said many developers weren't incentivised to build low-cost housing as they don't provide a very high return on investment, especially in regional areas where margins are razor-thin.

He said since state and federal governments are responsible for "crisis" housing, and developers focus on mid-range and premium housing, local governments are the only organisations left to fill the lower-to-middle-level gap.

"If the local government steps up to the plate and fills that affordable housing gap, then has the state government buy in to provide social crisis housing as part of that, the open market will look after itself," Mr Bennett said.

"We've seen that in Tamworth. We've got a lot of local developers building beautiful homes in different places. They're not going to forsake their profits and margins and so on to venture into the affordable housing space where we need to take responsibility."

Uniplan Group sales manager Thomas Thorncroft made the case that modular housing wasn't the cheap, low-quality housing alternative it used to be.

The Armidale-based modular construction company he works for has seen a boom in demand as construction costs for traditional houses continue climbing.

"The actual build time in our case is only 21 working days, so roundabout a month," Mr Thorncroft said.

Modular homes are houses built in an off-site factory then transported and assembled at the build site.

Mr Thorncroft said Uniplan's facility essentially worked "like a car assembly line".

"Essentially at the end of every day, a modular comes out of our facility, and another one moves in to start production," he said.

Glen Innes Severn Council director of place and growth Gayleen Burley advocated splitting up large lots into smaller subdivisions as a quick and easy way to utilise empty land.

"We have a lot of people in rural NSW who are elderly and might have resided in their house for 40 or 50 years, who don't necessarily want to look after a large backyard anymore," Ms Burley said.

Subdividing large lots of land is increasingly being seen as a way to increase housing diversity in rural NSW, where most residences are large farmhouses with lots of surrounding acreage.

The boss of Business NSW said it was important not to forget the need for homes suited to families with young children.

He advocated industry investment into "asset class" dwellings, three to four-bedroom houses or apartments which bring a reliable return on investment

"Looking to fix the housing problem by fixing it for the least advantaged is worthy but it doesn't fix the problem," Mr Harding said.

"We've got to go right to the middle of the market, we've got to look at the 18 to 30-year-old professionals, the trained and skilled people who can't afford to live and raise families because if we don't fix that we're doomed. They'll move out of the country."

Mr Harding also said planning processes could be sped up substantially using Artificial Intelligence (AI) to do repetitive tasks.

"All that rigmarole of checking the windows are in the right place and the building is in the right code compliance doesn't need to be done by humans anymore," he said.

Business NSW has been in conversation with the state government to explore ways to incorporate AI into the planning process.

Wrapping up, Tamworth council's general manager emphasised the need for cooperation across industry, charity, and all arms of government.

"The benefit of the diversity of the people here is: all the answers are here," Mr Bennett said.

"It comes down to the collaboration, the aggregation of skills, and the will to do something. We've all got great ideas about housing, but ideas without action are just a dream."

Most importantly, he said, was that whatever solutions we attempt to implement were driven and approved by the local community.

"One of the issues we have across all forms of government is you've got people like me who live in a nice four-bedroom house trying to make decisions on what we should be building for Maree's [Homes North's] clients," Mr Bennett said.

"I would much rather see 100 small answers that are well-integrated into the community than have massive developments and massive apartment buildings and those sorts of things."