Kāpiti mayor K Gurunathan is "shocked" a Housing New Zealand property in Waikanae has been left vacant for 22 months.
But Housing New Zealand said the house has needed extensive modifications hence the long delay in getting people into it.
Mr Gurunathan said he had been working to find alternative rental accommodation for a needy Paraparaumu family.
"I was advised Housing New Zealand has no suitable houses available within the central and Wellington areas and no vacancies in contracted housing.
"I was shocked to find out that HNZ has been sitting on a residential property in Waikanae with no tenants for 22 months."
He said records showed the Hihi Place house was bought for $700,000 in August 2017.
"Since then it's been left empty.
"It's astounding that a perfectly modern warm home can be left vacant for 22 months in the midst of a housing crisis.
"In the Kāpiti area HNZ already has a waiting list of around 94."
However Housing New Zealand said it purchased the house as a Community Group Housing property in 2017.
"We purchased the four bedroom property for a local provider of disability services as their existing property was no longer suitable for their needs," a spokesperson said.
"The property required extensive modifications to accommodate the needs of the disability services provider such as remodelling the interior to make doorways wider, installing ramps, a turning area for a mobility van and extensive fire safety work including a sprinkler system.
"These were completed in November 2018.
"Sourcing certified contractors to carry out this work in a time of increased construction demand nationally was also challenging.
"We have submitted all compliance supporting documentation and are now expecting Code of Compliance from the council in the next few days.
"The disability services provider will then be able to move in."
The spokesperson said the Housing New Zealand Community Group Housing team manages around 1500 properties nationally for a wide range of organisations and social services providers.
"We work closely with community groups to provide secure sustainable housing solutions that meet the needs of the clients or customer groups they support."
Mr Gurunathan said the family he was trying to help live in a house bought by council's operations department for roading purposes.
"Temporarily rented out it is now surplus to requirements and due to be sold.
Council had given her the legal 93 days notice with an assurance from me to arrange for extensions if the tenant can't find alternative accommodation."
He said the social housing crisis was a problem created by successive previous governments.
"Local councils, like Kāpiti Coast District Council, face huge infrastructure costs, are being expected to make up for this central government failure by providing social housing.
"KCDC currently has 118 pensioner housing.
"That's the stock of our social housing.
"These were built back in the 1960s using cheap, low-interest Government loans.
"Those type of loans were stopped in 1991.
"Councils are also excluded from being community housing providers and receiving income related rents."
Cr Jackie Elliott said the mayor and councillors had remained unresponsive to attempts by her to reconsider the Dec 6 decision to dispose of two council owned houses. One at Paekākāriki, that a housing trust intended to purchase and a second in Paraparaumu housing a family with four children.
"I am very disappointed that not one councillor has even replied to my request for support, first made last Thursday evening.
"The mayor has made a big deal in the media, about his proposal to delay the sale of the Ngahina St property until the family are relocated, but it is a gutless, weak and ineffective response to the opportunity has in his hands to stop the sale altogether.
"There are provisions in standing orders that enable, either the mayor, as chairman, or any four members of council to bring the report paper CS-18-671 to dispose of the properties back for complete reconsideration, given the lack of full and adequate information in the paper for us to even be aware of the consequences of the decision to sell.
"Even though, I did not vote in support of the disposal, it is important that we use every avenue available to us, to reconsider the dumping of these properties, and how we set precedent for the next 13 publicly owned homes that council are considering selling to repay debt."