A 'league table' ranking councils on how many houses they've approved along with how long they are taking to be approved has been set up for greater transparency.
Planning Minister Paul Scully has also delivered an updated statement of expectations demanding councils pitch in to curbing the crisis and outlining appropriate time frames for approvals.
Councils found to be "consistently underperforming" will be forced to take action to improve outcomes, as set by the Local Government Minister.
Approvals and completions have consistently lagged the required tally of 75,000 per year.
"If we don't measure performance then we can't monitor it properly … councils approve the vast majority of residential development in our state, so tracking their performance is critical if we together want to meet our housing targets," Mr Scully said.
"The updated Statement of Expectations, alongside improved monitoring, reporting, support and compliance initiatives will help councils and the state to speed up development assessments and improve transparency and accountability in the planning process."
Walgett tops the league table for average lodgement days at two days, although it only lodged 24 applications in the 2023-24 financial year.
Maitland sits in second at four days having lodged 910 applications.
Central Coast has lodged the most applications at 1702, although it took 21 days per lodgement for approval.
The state government is sweetening the pot for the top performing councils, promising $200 million in financial incentives via infrastructure funding.