Wellington mayor Justin Lester has announced the city will gain at least 750 new social and affordable homes over the next decade.
The units will be developed as part of Wellington's housing upgrade programme.
"This is a major development in how our city handles housing," Lester said.
"We know we need a new approach to social and affordable housing so that we don't end up like Auckland.
"Next week, I'll be asking my councillors to agree to a new programme which will see us utilise council land better and develop quality new homes as fast as we can.
"Some will be social housing, others will be affordable homes aimed at first-home buyers. Half will be replacing outdated stock and half will be brand new on top of what we already provide. This will mean a net increase in our social housing units."
Lester said the housing would be "good quality homes" in mixed developments.
"We aren't just going to sit on the sidelines and leave social and affordable housing to the market. We're going to roll up our sleeves, work with developers, and get the job done," he said.
"This is just the start - working with the private sector, community housing providers and a new urban development authority, we will be launching a range of new developments to address housing issues in Wellington."
Deputy mayor and housing portfolio lead Paul Eagle said the development was an exciting new phase, building on a decade of earthquake strengthening key complexes and upgrading existing social housing.
"The focus changes now. We will now be proactively working with partners to develop new sites, build new homes, and seeing more affordable homes built at the same time," Eagle said.
"This programme will not impact rates because, as previously signalled, we'll be making some movements in our portfolio where we have properties that are outdated or not suited to our tenant's needs, in order to reinvest in new high quality homes. The end result will be more social housing units for those in need.
"After consulting with experts from across the country through the Mayor's Housing Taskforce, all the feedback has confirmed this is the right direction for Wellington City Council to head, and there is an immediate opportunity to make a difference."
Many of the homes will be able to be built within the next three years including completion of 105 homes under construction at Arlington site 2 - a model for future developments, he said.