Palmerston North's first social housing development in more than three decades is hoped to set a standard for private landlords to follow.
"Social housing provides housing for some of the vulnerable people we've got in our community," Palmerston North City Councillor Susan Baty said.
"It means they can have some subsidised rents and enjoy a good quality of life. They've got a home for life, they never have to be kicked out, so that means they're safe, secure."
Thirty-two old units are being bulldozed to make way for 50 new ones in Papioera Place.
Helen Williams, one of the first people to take up residence in the development, was looking forward to the change.