A public meeting at Carrington Community Hall from 6.30 tonight will examine plans to potentially provide 24 low-cost dwellings on Young Street.

Newcastle councillor Aaron Buman, who lives in Carrington, said residents did not want 24 low-cost housing units in the main street.

"We thought the days of the Government bundling everyone together was over," he said.

Cr Buman said residents supported low-cost housing, but on a lesser scale, and would urge federal and state members to support their view.

State Newcastle MP Jodi McKay said yesterday the Carrington sites came to Housing NSW's attention as part of a tender seeking land and property packages to help reach a target of building 6500 homes nationally by June 2012 under Federal Government economic stimulus planning.

Ms McKay said such projects provided financial returns to property owners, jobs for builders and tradespeople, and accommodation to those in need.

"Social housing is an important part of the Newcastle community. It provides safe and secure housing for many people who simply cannot afford to rent in the private market," she said.

Federal Newcastle MP Sharon Grierson said projects required Federal Housing Minister Tanya Plibersek's approval and there was nothing for Carrington before her at this stage.