Housing New Zealand says it expects work to start within the next month on building 69 state houses and renovating 10,000 others.
The general manager of assets, Kevin Mara, says the new state houses all have plans ready or almost ready and are on Housing NZ land so they don't need resource consents.
They still need building consents, but he says councils now have so few building applications to process that they are approving new buildings within 20 days.
"A lot of councils are now turning them round faster than that," he said.
"We are confident we can deliver [the 69 new houses] by June 30."
The number of new houses in the Government's stimulus package is tiny - reversing less than 1 per cent of the decline of 7134 new dwelling permits granted in the country last year.
But builders yesterday welcomed the immediate start, and a much bigger investment in upgrading existing state houses and schools.
"It will help retain skills and keep people that are currently in the sector engaged, and depending on where it's spent and the timeframe, it may be able to attract those that have had to leave the sector because of falling consent numbers," said Master Builders Federation chief Warwick Quinn.
Certified Builders Association president Richard Merrifield, speaking from a Nelson building site, urged Housing NZ to give the work to small local building firms, not just the big firms. "As soon as that money is with the builders, they're going to be spending with the merchants and it's a chain reaction that keeps everyone in work down the line," he said.
The package includes $20 million for the 69 new houses in the current financial year and $104.5 million extra for upgrading existing houses in the 18 months to June 2010.
New Housing Minister Phil Heatley criticised Housing NZ before the election for pouring its capital spending into new housing while accumulating a $2 billion backlog of maintenance and renovation work on its existing houses.
His package redresses that balance by more than doubling the number of upgrades in the 18 months to June 2010 from 8300 to 18,300 - more than a quarter of all the country's 68,644 state houses.
He has left unchanged a separate programme to retrofit insulation and other energy-saving changes into 13,000 state units by June 2010. Some of these will be the same houses that get the major upgrades.
The total number of state houses fell under the last National Government from a peak of 70,234 in 1993 to a low of 59,462 in 2000 because of a policy allowing tenants to buy their houses.
The Labour Government built the numbers back up by an average of about 1000 a year during the last nine years, but the expansion slowed to a net increase of only 516 in the year to last June because of the slump in private house building.
National has promised to again give tenants the right to buy their state houses.