Housing Minister Yvette Berry said while much of the public housing was currently in the inner south and inner north, the renewal would spread it much more evenly across the suburbs.

"Typically, new developments will range from 14 to 25 dwellings and this will be vital in ensuring we do not return to the days of high density, multi‑unit properties," she said, with more public housing in Gungahlin, West Belconnen and Molonglo. The new Yarralumla suburb, though, will not include public housing.

The government is replacing the hundreds of units to be demolished in Northbourne Avenue; the Allawah, Bega and Currong flats in the city; and large public housing blocks in Griffith, Woden and Red Hill.

But Ms Berry's plan to "salt and pepper" the new homes has already run into trouble, with residents of Nicholls upset at plans for a 14-unit development next to the Gold Creek primary school.

The government received 200 submissions from residents worried about property values, crime, drugs, safety of children, lack of medical facilties and loss of open space.

Former president of the school's parents and citizens association, Michael Rush, said the government had initially talked about housing for elderly but had "flip-flopped ... between aged, disabled, supportive and sustainable public housing". The units were two bedroom, so "clearly not for the elderly", he said.

Residents were concerned about the kinds of tenants in an area close to a childcare centre, preschools, schools and shops, he said; also pointing to a proposed access gate that would lead to a carpark used by school and childcare families.

"ACT government has refused to rule in or out any kind of tenant at the location," he said. "Public housing is important. Its location should also be common sense. A location next to a school is not fit for this purpose."

But Labor backbencher Meegan Fitzharris said residents had misunderstood the development, which would be "supportive housing" for elderly people and people with a disability. It was well-suited, close to shops and a bus line.

"There are multiple public housing developments located on a site just like this, nearby schools and shops right across our city," she told the Assembly. "... There is a supportive housing complex being built right next door to my own children's school in Harrison."

Ms Berry warned against "unfair and untrue generalisations around antisocial behaviour or danger when it comes to public housing tenants", which she said were "

Spreading public housing more evenly around the ACT would reduce concentrations of disadvantage. It would be indistinguishable from the surrounding houses, she said, pointing to benefits from having "mixed communities, people living side by side, going to the same doctors and the shops, sending their kids to the same schools and children from some of the wealthiest and poorest families in Canberra attend schools together in suburbs like Red Hill".

"And let us remember, housing tenure does not matter to children playing together in the playground," she said.

Liberal housing spokeswoman Nicole Lawder supported the "salt and pepper" approach, but called for better consultation. If Nicholls' residents had misunderstood the plan, as suggested, the failure was the government's, she said.

She questioned the location of public housing away from the city and off major transport routes.

"How will a person living on a low income be able to access services, communities and support structures if they live in a suburb that has limited public transport, especially if they do not drive a car?"

Gold Creek parents and citizens association president Michele Justin said parents had received no guarantees about the kinds of tenants that could be housed there and were worried about the transfer of Northbourne Avenue's drug problems to the area. If the government's plan was for the elderly and disabled, that should be guaranteed, she said.

The government's definition of supportive housing covers people needing support services such as counselling, domestic assistance and personal care.

Public Housing Renewal Taskforce coordinator David Collett said in choosing locations

"Dispersing public housing and reducing concentrations of disadvantage contributes to a diverse and inclusive community. It provides housing stability and security for the disadvantaged in the community and helps to break the cycle of poverty and homelessness," he said.

The strategy gave tenants the chance to be part of their communities without the challenges of living in large complexes.