Kiama Municipal Council has commissioned BHI Architects to assess four possible locations for an art space in Kiama, including the cottage, the ambulance station, the Old Council Chambers and the HACC Centre in Hindmarsh Park.

Asked why the council would investigate a site subject to an Aboriginal land claim, which has prevented the NSW Police Property Branch from restoring the property, Kiama councillor Neil Reilly said the consultant's role was to objectively evaluate the options.

The cottage and the ambulance station are currently under state control.

"We would use that objective study as part of a case to release the building for such a purpose," he said.

"It may be able to expedite things."

Cr Reilly said the Aboriginal community would be included in any proposal concerning the cottage site.

"I would say we would show full respect to their claim and we might be able to reach some mutual agreement," he said.

An arts centre is one of the ideas for the cottage's future.

After the Wall to Wall Ride for Remembrance in honour of fallen police officers in September, which started from Kiama Police Station, resident Jeff Williams wrote to the Kiama Independent saying the cottage could become holiday accommodation for fallen officers' families.

Member for Kiama Gareth Ward also suggested last year the cottage would be ideal for a small business.

But Mr Ward disagreed with Cr Reilly, saying having a proposal in hand would not affect the land claim assessment.

"There's hard and fast laws on how land claims are assessed - we have to let the process be gone through," he said.

There is currently a decade-long backlog in land claims.

The most recent claim granted to the Illawarra Local Aboriginal Land Council was 182 hectares on the escarpment, including the former Tongarra Colliery site - the claim took 25 years including two appeals in the NSW Land and Environment Court.

The claim for the police cottage, police station and courthouse was lodged in November 2005.

The land council's spokeswoman, Sharralyn Robinson, said if the claim was successful, the lots' future would be determined by the not-for-profit's members and the buildings' heritage status would be taken into account.

She said Police Minister Michael Gallacher had not yet determined the claim and its position in the queue was unknown.

Residents have grown increasingly concerned as the cottage has fallen into disrepair, including rusted-out gutters, peeling paint, rising damp and a wooden board replacing a damaged part of its front fence.

The rear part of the cottage was built as a lock-up in 1863, with the front part added in 1902 to complete a five-bedroom home for the resident police officer at the time.

A spokeswoman for Mr Gallacher said the NSW Police Property Branch prioritised funding for operational and occupied residential properties.

"The current Aboriginal land claim makes entering into long-term leases with external tenants problematic," she said.