The Government's backing of a new social housing development in Toi Toi highlights Nelson's growing need for affordable housing, the new housing minister says.
The Nelson Tasman Housing Trust has been given a $513,000 grant toward building four homes in St Lawrence St, in the Victory suburb of Toi Toi.
The houses will provide space for up to 26 people, with the tenants a mix of low-income families, refugees, and the elderly.
The tenants will be referred to the trust from agencies.
The trust was one of only three around the country to receive funding from a $3.11 million grant to help build 26 new social housing units in Auckland, Nelson and Canterbury.
Nelson-based MP and Housing Minister Nick Smith announced the funding this morning.
He said the Government's social housing unit had decided which projects were a priority, and the fact that Nelson was chosen for a grant highlighted the region's need.
"If we look at housing affordability measures, the truth is Nelson is under pressure.
"We do have low-income families that are really struggling to get access to funding for homes."
Nelson's population growth was 1.5 per cent per annum, close to Auckland's 1.7 per cent per annum, he said.
The Roost home loan affordability report showed it took 56.3 per cent of of a median Nelson income to pay a mortgage on a median-priced house in December.
This was up from 52.6 per cent the previous month and 50.9 per cent a year ago.
The funding was part of a broader strategy of growing the community housing sector beyond funding Housing New Zealand, he said.
International evidence showed larger housing estates could turn into ghettos.
So it was important to mix social housing into the broader community.
The project had also benefited from Nelson City Council waiving the development fees, something other councils, including Tasman District Council, were reluctant to do, Dr Smith said.
Trust chairman Keith Preston said the grant was a big deal for the organisation, and drew attention to the region's need.
The trust was also working on another nine houses in the Brook Valley, and had more planned for St Lawrence St.
Once all projects were complete their housing stock would jump from 15 houses to 36, he said.
The houses will be built by Jennian Homes, with some labour provided by carpentry students from the Nelson Marlborough Institute of Technology.
Jennian managing director Simon Collett said the project had a "feel-good factor" to it. The company had worked with the NTT to build nine homes in Richmond in 2011.
They aimed to provide a completed home to tenants, so they could move in with the minimum of hassle, he said,
Other organisations to receive grants were VisionWest Community Trust in West Auckland and ComCare Charitable Trust in Canterbury.
The organisations will contribute $3.87m of their own money, resulting in nearly $7m in new housing developments.
The grants were the first from the Government's new $104m social housing fund to assist families with acute housing needs.
Does Nelson deserve to be classed as a city?Related story: (See story)