The Land Commission of NSW was established by the NSW Government in November 1976 in response to the shortages of residential land and the accompanying rapid price rises which occurred in Sydney, as in the other major cities in Australia in the late 1960s and early 1970s.

The Land Commission of NSW, which would later become Landcom, commenced operations on 8 November 1976.

The organisation’s main purpose was to acquire land for present and future urban development and other public uses to help moderate the housing market, stabilise land supply and support the development industry with homesite sales to be made at the ‘lowest practicable price’.

Landcom acquired land at St Mary’s, Campbelltown, Penrith and in the Illawarra, and released its first land for sale on 23 April 1977 at St Clair Estate. With the economy depressed and finance limited, in the mid 1970s Landcom worked with builders to create land and house package deals for prospective buyers. Landcom was also actively seeking to develop relationships with the private development industry and with industry bodies. Landcom was active in advocating for rezoning and approval efficiencies within government to help stabilise the housing market and support industry.

By the mid 1980s Landcom had become an active supporter and driver of urban consolidation, creating a Special Projects Unit in 1985 to promote medium density development with smaller lots and innovative design. Landcom expanded its operations to land and house packages and joint promotion schemes with builders as well as new partnerships with major landowners and developers to increase land supply. It expanded its advocacy into coordinated infrastructure funding, subdivision standards as well as planning and land consolidation efficiencies. During the early 1990s the organisation also developed a focus on sustainability, providing community facilities and supporting new communities. Landcom also started demonstrating urban infill and medium density approaches in greenfields development to address urban sprawl.