Housing Minister David Borger said the property transfers would lay "the foundation for a viable not-for-profit housing sector in NSW" because the new owners would be able to borrow against the value of the properties to expand their housing portfolios.

But the announcement has angered some of those fighting against the controversial housing projects, including the Swansea Action Group, which attracted about 150 people to a protest outside the office of state MP Robert Coombs on Saturday.

Action group secretary Sylvia Lee said yesterday that the transfers meant neighbours would have no comeback once things inevitably went wrong.

"The Government is washing its hands of the projects," Ms Lee said.

She said the group was concerned about three-storey housing projects in Josephson Street and Boyd Street, Swansea.

Housing Minister David Borger said that under new laws passed last week, the housing department could transfer ownership of its properties instead of leasing them as it traditionally had.

Mr Borger said the housing department intended handing over more than 90 per cent of the 6000 public housing projects being built with $2 billion of federal stimulus funds.

He said the housing providers could then borrow as much as half of the property value to build new community housing.

A similar UK scheme had run successfully for more than 20 years.

State MP for Lake Macquarie Greg Piper said he was not particularly worried about the transfers but he was adamant the Government had trashed planning laws in "self-approving" the projects.

Cr Piper, who is also Mayor of Lake Macquarie, said both Swansea projects ignored new floor-height laws introduced to cope with rising sea levels.

"I'm still very angry with the process, which is absolutely wrong, and I understand why people are angry."