The planning change, which also allows the homes to be strata-titled so they can be sold as separate titles, is out for six weeks' public comment, but because the list of Fluffy addresses has still not been released, many Canberrans probably remain unaware they have Fluffy houses in their street. The government says it has told the immediate neighbours of the 340 Fluffy homes it now owns.

The move could transform the character of some streets, with some containing seven or more Fluffy homes. One street appears to have nine. Two streets have seven houses each; four streets have six each; four streets have five.

The plan is designed to maximise the value of the blocks to help the government recover some of the cost of the $1 billion buyback and demolition of the 1021 Fluffy homes. But Planning Minister Mick Gentleman stressed it will still leave the government out of pocket by about $400 million, even once all the land was sold off.

The draft Territory Plan change released by Mr Gentleman applies to homes in the standard RZ1 residential zone, affecting 770 blocks in 56 suburbs.

At the moment dual occupancy is allowed in the suburban zone only on blocks bigger than 800 square metres; and the blocks can't be split into separate titles. The Fluffy homes will not only be able to be sold as separate titles, but dual occupancy will be allowed on smaller blocks, of 700 square metres.

At the moment, houses on dual occupancy blocks can cover no more than a third of the block. The Fluffy dual occupancies will be allowed to cover 50 per cent of the block if both homes have direct street frontage, and 35 per cent otherwise.

Two-storey homes will be allowed if both homes have direct street frontage; otherwise the limit will be one storey.

The draft variation describes the move as "a modest increase in the development density potential" of the blocks. As well as defraying buyback costs, it would "increase housing choice by allowing a modest increase in residential density throughout the suburbs of Canberra".

"The potential for negative impact rising from the small increase in residential density is safeguarded through building height limitations and design criteria outlined in this draft variation," it says. The design criteria is as follows: "The design of buildings encourages high quality architectural standards that contribute to a visually harmonious streetscape character with variety and interest, whilst not detrimental to, or overtly detracting from the existing streetscape character."

The change doesn't apply to heritage blocks.

Current owners will still have the first right to buy their land back, albeit at the increased value – which will mean higher rates.

Asbestos Taskforce head Andrew Kefford said even with the plan change, not all of the blocks would be suitable for dual occupancy for reasons such as easements, power lines, or a steep section.

"It's certainly not the case that every one of the blocks that has the permission will have this sort of development done, all we are doing is giving permission to have this done. It's still absolutely likely, and I think probable in a good number of cases, that people will choose to build a single house," he said. "There's nothing in these changes that requires two buildings to be built. There's permission to build two, but you absolutely don't have to."

Asked about the fact that the list of Fluffy homes won't be released till June, making it difficult for people to comment on the planning change that could bring significant change to some streets, Mr Kefford said many neighbours had already been told by Fluffy owners, and the government was telling adjacent owners when it took possession of homes. Whoever developed the block would still need a development application at the point of deciding to build, he said.

Mr Gentleman said the change would "facilitate urban renewal throughout the capital, through the redevelopment of decontaminated Mr Fluffy blocks".

"These changes are a measured and modest response to the Mr Fluffy legacy that will allow the ACT government to recoup some of the costs," he said. "... The changes proposed are minor, and while there could be some uplift in the resale of surrendered blocks, this will not have a significant impact on the community."

In October, Mr Gentleman said 863 Fluffy homes were in the standard RZ1 residential zone. Of those, 567 were on blocks bigger than 800 square metres, and another 204 were on blocks of 700 to 800 square metres. He also suggested then that an architect might be required to design dual occupancy developments, but this idea isn't in the plan released.

To date, the government has made 853 offers to Fluffy owners, with 678 owners accepting, and 340 homes in government hands. Mr Kefford said 91 owners were yet to request a valuation and he would write to them again this week, reminding them the offer closed at the end of June.

Pilot demolitions are to begin in May, with two public houses to be demolished, along with two or three others.