Papakāinga is already allowed in some parts of Waipā but a change to the District Plan is required for more to be developed. There is currently no budget for this work.
Recently, the council shortlisted seven local projects to receive parts of the funding, but the papakāinga development was not one of them.
Out of the 92 people responding to the survey, 29 said the council should reject any funding and 21 wanted to wait until July 2024 when further funding may be made available.
The survey also asked respondents to rank the seven shortlisted projects according to their priority.
The majority of people ranked a resource recovery centre and the development of the Te Ara Wai land wars museum as top priorities.
A final decision about whether or not to apply for funding, and for what projects, will be made by the council's service delivery committee on September 20.
The Better-Off fund was developed alongside the Three Waters reform programme to help councils pay for projects that help build resilience to climate change or natural hazards, enable housing development or support community improvements.
While the Waipā District Council continues to strongly oppose the Three Waters reform, it can still apply to the fund and still continue to criticise the reform proposals.