AN ADVISER to the Obama administration has warned the Keneally government to exercise extreme caution before using proposed powers that would allow it to acquire private land and turn it over to property developers.

Henry Cisneros, who was secretary of housing and urban development under President Bill Clinton and now advises the White House Office of Urban Affairs, said the government would have to demonstrate that seizing private land was for ''a larger public good''.

Dr Cisneros, who is in Australia as a guest of the United States Studies Centre at the University of Sydney for a series of lectures and meetings, told the Herald such powers were controversial in the US.

''It's been a raging controversy that's gone all the way up to the Supreme Court,'' he said.

''It is a problem and, in the US, private property is treated so sacredly there would be inhibitions against it. On the other hand, there have been court rulings saying that, for a defined public good, it is allowable.''

Dr Cisneros served four terms as the mayor of San Antonio, Texas, before being appointed to the Clinton cabinet in 1993. He is now a developer of low-income housing and an occasional White House counsellor.

As mayor, he said, he never forced a private owner to sell to the city. ''I did not do it to someone who did not want to sell,'' he said. ''We frequently approached people about selling in order to build a 137-store mall downtown, but it was for business use.''

But if governments can prove that buying private land occupied by a single home or business was to sell it to a developer for medium and high-density dwellings to ease a housing crisis, such powers are justified, he said.

''You could compensate people appropriately, even into the future for the enhanced value,'' he said. ''If fairness can be achieved, if there is a larger public good in creating greater density of housing, then any city that can do it should work at it.''

Dr Cisneros also warned that as Australian cities become more crowded and expensive, governments may have to build ''workforce housing'' for essential staff, such as police, teachers, nurses, and firefighters.

Several years ago, after a fierce storm lashed Seattle, there was no power for several days because repair crews, who could not afford to live in the city, could not return to work from their distant homes. King County in Seattle now has an ordinance that gives workforce housing priority on plots of unused or abandoned land.

In San Jose, California, the city had to offer housing aid to teachers who were resigning after just two years because they could not bear the long commute to school. ''The city was losing all that investment in teacher training,'' Dr Cisneros said.

In nearby San Ramon, police who are forced to live 120 kilometres away now work three 12-hour shifts a week, and stay in dormitories. ''They can't make the commute,'' he said. ''So you're getting dysfunctional policing.''