The Blue Mountains is facing threats to its character and environment as the state government looks unlikely to grant the area an exemption from a new housing code.
Blue Mountains mayor Mark Greenhill described the situation as "madness" as he revealed the NSW planning department told the council in correspondence last week that it would not be exempt from the "inappropriate framework".
"Despite meetings with the minister... and confirmation of the council's compelling case for exemption and assurances from the department... of an acceptable planning solution, no exemption has been provided. Now - in correspondence - the Planning, Industry and Environment Department says they will not release the city from this inappropriate framework," he said.
But a spokesperson for the department indicated the matter could still be considered if it received more detail from the council.
"We've given councils plenty of time to amend their local planning rules to set out areas where medium density cannot be permitted and will consider a planning proposal from Blue Mountains Council on this matter once we receive it," said the spokesperson.
Council has opposed the housing code - now named the Low Rise Housing Diversity Code - since its proposed introduction in April 2018. It overrides the city's own local planning controls and allows for substantial residential development, including medium density, without the need for a complete development assessment.
"We have fought hard to keep such a proposition out of the Blue Mountains and have been seeking an exemption from the code for almost three years," said the mayor.
He said the code poses an "unacceptable risk to the environmental values of the Blue Mountains World Heritage Area as it allows for substantial growth in residential development, resulting in significant increases to storm water run-off into the fragile environment".
"It will increase development and cram more people into our bushfire-prone city, and this is just madness. Such a move places people at risk and places more pressure on our emergency services.
"The code will also erode the built character elements that define our towns and villages... The Blue Mountains is not just another suburb of Sydney and the government need to get on board with this fact."
But the planning department has defended the plan, saying it will deliver more diverse housing to meet the needs of a growing and changing population.
"By allowing for faster approvals the code is encouraging more housing diversity, helping improve housing affordability and creating much-needed construction jobs across NSW," said the department spokesperson.
"The code allows for well-designed dual occupancies, terraces and manor houses to be developed under a fast track complying development approval in areas where council zoning already permits these types of housing."
The latest development comes as the Labor mayor joined with former Liberal Party mayor now turned Independent councillor, Daniel Myles, of a pro-development push by candidates in this September's council elections.