Changes to laws on how brothels are regulated by New South Wales councils could see a rise in crime, corruption and illegally run brothels according to UTS law researcher Penny Crofts.

Speaking at a UTSpeaks Public Lecture last week Ms Crofts said although brothels had been legal in NSW for more than a decade, changes to state legislation could drive many small sex businesses back underground.

According to Ms Crofts the Department of Planning's recently gazetted Standard Instrument (Local Environmental Plans) Order (2005), to be adopted by all local councils within five years, will distinguish home brothels from other home businesses.

Home brothels make up almost 40 per cent of NSW's sex industry.

"This will have the unfortunate effect of drawing attention to home occupations for sex services and, based on past practice, overly restrictive council policies that could in turn create circumstances favourable to corruption," Ms Crofts said.

"Presently, within the 50 per cent of councils that do not have specific sex services policies, home occupations (sex services) are treated in the same way as other home occupations.

"These businesses operate legally without requiring consent. The Standard Instrument LEP will have the immediate negative effect of rendering these operations illegal.

"This contradicts the intentions of the original legislative reforms in 1995. It also drives the sex industry underground, making it difficult for health and safety and sex-worker organisations to monitor and keep track of the businesses. Illegality also undermines the safety of workers and their clients, and fosters the possibility of police and council corruption."

Ms Crofts believes the disgust of some in the community when they become aware of the existence of a nearby brothel endangers the progress that has been made over the past ten years in brothel regulation.

"Most brothels are small discreet home businesses that have no impact on amenity in a local area and most residents would be unaware that the sale of sex was taking place," she said.

"The Standard Instrument LEP will cause such businesses to be revealed, paving the way for community outrage to once again guide council policy and drive legal businesses underground.

"The community as a whole cannot afford to turn back the clock and again risk the growth of crime, violence and council and police corruption and nor can we expect small home sex businesses to be sited out of the way in poorly policed industrial zones. There are no legitimate planning issues justifying the discrimination against home occupations (sex services).

"It is in the interests of all that home occupations (sex services) are treated in the same way as other home occupations."