The Ruapehu District has been allocated $7.78 million from the Covid-19 Response and Recovery Fund towards the development of social and affordable housing.
Infrastructure Minister Shane Jones announced the funding on Thursday.
Ruapehu Mayor Don Cameron thanked Jones for recognising the housing challenges facing rural communities such as Ruapehu.
"Ruapehu has a wide range of housing problems affecting all sectors of our
community from homelessness, overcrowding and unaffordability through to a
shortage of housing for essential workers and others," Cameron said.
The lack of suitable housing was putting a "real handbrake" on the district's economic growth and social wellbeing.