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Maryan Street, Mayor Kerry Prendergast and Housing New Zealand chairman Pat Snedden signed the Deed of Grant at Newtown's Te Ara Hou flats, the first set of homes set to be renovated.

"Wellington council housing is outdated and the units are small, cold, noisy, and poorly configured for modern living. These issues have been building for some time and had to be addressed," Maryan Street said.

"Over 4000 tenants in 2300 housing units will benefit from the partnership, which will involve the Council consulting with tenants before construction begins."

"The funding was set aside in this year's Budget and reflects the Labour-led government's on-going commitment to investing in safe, affordable and healthy social housing."

"In return, the council has agreed to reinvest rental income back in to its housing business, fund all other replacement and renewal costs for its housing, improve its tenancy management, and remain in social housing for 30 years at current service levels.

"Local authorities which opt to provide social housing make an important contribution to ensuring housing needs in their area are met and the Wellington City Council's on-going commitment is significant," Maryan Street said.

"The Labour-led government will continue to work with councils and other not-for-profit organisations to encourage the provision and expansion of affordable rental housing."

"A number of initiatives have been put in place to help New Zealanders into homeownership and more are under consideration. Yet there will always be a need for affordable homes to rent and we need a greater number.

"Since 2000 we have increased the number of state houses by nearly 8000 to help meet demand and that acquisition programme will continue.  With the efforts of other organisations such as the Wellington City Council, we will ensure New Zealanders are properly housed," Maryan Street said.

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