Woronora Heights residents are dismayed Sydney Water is preparing to sell off virgin bushland, in an area inhabited by koalas, for housing.
A koala took up residence immediately adjacent to the proposed development site in 2020 and the NSW BioNet Atlas records more than a dozen sightings of koalas within 10km, including three nearby.
A development application (DA) has been lodged on Sydney Water's behalf for a two-stage subdivision of the 32,760 square metre site on the edge of extensive bushland opposite homes in Bundanoon Road.
One lot would be zoned E2 Environmental Conservation and be retained in its natural state apart from the creation of an asset protection zone and new fire trails.
The other portion would be zoned E4 Environmental Living so as to create "five oversized residential lots inclusive of asset protection zones, retention of significant trees and rock outcrops where possible".
The land was designated for water pipeline infrastructure, which is no longer needed.
Residents question the need for Sydney Water to sell the property.
"I am aware there are developments all over the place, but this is virgin bushland - is there a need to build on it?" asked Damian Beaufils.
"The children loved having a koala make its home across the road last year, and it breaks my heart to think we are taking this away from their kids."
An ecological report says the site is home to other threatened species including Eastern bent-wing bat, Grey Headed Flying Fox, Powerful Owl and Red-crowned Toadlet.
A Sydney Water spokeswoman said land holdings were reviewed regularly "to ensure that we are maintaining land required for operational use and disposing of land that is no longer required".
"This enables Sydney Water to reduce operating costs and fund repairs and maintenance of its other assets which ensures water bills remain as affordable as possible," she said.
The spokeswoman said Sutherland Shire Council zoned the portion of land as E4 Environmental Living, "indicating that residential development may occur subject to council approval".
"We acknowledge concerns and encourage all to participate in the exhibition process and make a submission to the council, which will determine the outcome of the development application."