City Mission has released plans for a new community health precinct at its premises on Wellington Street, which will see the creation of a social housing and community health precinct and will engage health professionals, clients and the education sector.

It will include expansion of its premises, including more client rooms for its Safe Space program, along with client rooms for allied health and education.

The top three floors will be turned into affordable social housing, aimed at single people, to help address the chronic lack of affordable housing around the state.

READ MORE: Tasmania's homelessness crisis seems to only be getting worse

"We see it as a place where allied health professionals and other health services can co-locate with us," City Mission chief executive Stephen Brown said.

The project has been planned for the last three years, but Mr Brown said they'd recently applied for a federal government grant.

The precinct has been identified by Launceston business and industry bodies as a project of regional priority ahead of the federal election.

There will be 35 units built on the upper floors, and the other expansion, which includes expansion of the Safe Space program, will occur in a vacant block at the back of their existing premises in Wellington Street.

READ MORE: Elective surgery delays anticipated as hospital COVID plan escalates

A new frontage on Frederick Street will be created.

Mr Brown said the project totalled about $15 million, and City Mission was seeking $4.7 million from the federal government, $5 million from the state government and the rest will come from City Mission themselves and from charitable donations.

The Safe Space program offers emergency crisis accommodation for people who are at risk of homelessness and gives clients a safe space to sleep and shower.

Clients also get access to free meals.

Mr Brown said there were about 25 people who accessed Safe Space in Launceston every night, but the demand was increasing all the time.

"We do have to do some turn-aways, which is part of the reason we want to develop the precinct," he said.

Safe Space also allows people to attend if they are under the influence of drugs or alcohol, as long as they are not adhere to behaviour expectations.

Mr Brown said it was a program designed to get people off the street and give them somewhere safe to sleep at night, and it was no judgement.

Demand for social and affordable housing is also increasing, with average house prices and rent skyrocketing in the past 12 months.

READ MORE: Greyhounds were severely emaciated, rescuers told court

Mr Brown said City Mission had already started discussions with the state government on how it would support the project, but it required federal government support.

If funding is secured, the precinct will also bring together TasTAFE and the University of Tasmania, who are both in the process of investigating whether they can bring students into the space to learn allied health and aspects of social service.

"Our vision is to create a new community of health and social care organisations collaborating in a place so that service users and the broader community can participate in creating a supportive, integrated, innovative environment and pathway to improved health and well-being for everyone," the project brief to the Northern Tasmanian Development Corporation reads.

"The 2873 sqm commercial/health/social care space building development will form an integral part of the health and community services precinct for Northern Tasmania enhancing collaboration, innovation, training and connection spaces for clients, care professionals and students."

The project has broad support from key stakeholders including, Launceston City Mission, Vos Construction, Vos Foundation, Health Recruitment Plus and the Launceston Medical Centre and discussions continuing with UTAS for the creation of social services learning spaces, TasTAFE for training places in social care services and Launceston Head to Health Centre.