Whanganui leaders have largely backed the district's new status as a refugee resettlement location and say the city will be equipped to accommodate new families despite concerns being raised about housing supply.

Immigration Minister Iain Lees-Galloway announced on Thursday Whanganui will become one of five new refugee settlement locations around New Zealand with families to start arriving in Whanganui in March 2020 and scale up to about 110 people each year.

Whanganui and Partners chief executive Mark Ward said the economic development agency would help prepare the city for the intake of refugees in that jobs and housing was "inherent in our purpose".

Ward said housing was "a major concern" for Whanganui and Partners in response to concerns raised in social media comment.

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"But it's a problem we have to respond to anyway, so I suggest we respond completely," he said.

"I'd say 20 new families (in the first year) isn't the issue."

Ward said Whanganui had experienced quick growth which policy couldn't keep up with fast enough but Whanganui and Partners would be putting a big focus on getting investment in the residential housing market at all levels.

Ward said the district also had time to prepare.

Immigration New Zealand have said Whanganui can expect up to 3-5 families every six-eight weeks arriving in the city from March 2020.

"I think that's a good balanced number," Ward said. "It's not over the top and it's not lip service.

"It's nice to be recognised that we are a safe pair of hands and a good community for, in some cases, dispossessed people to be resettled."

The cultural diversity and skills refugees brought to Whanganui would be valuable, he said.

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"That's very healthy for our community and it's a good mindset to have."

Whanganui MP Harete Hipango, however, took to social media to label Thursday's announcement "ill-conceived" in a since deleted Facebook post.

"Some shell shock today with Labour and some bombshell announcement dropped on Whanganui today," she wrote.

"This is yet another ill-conceived Labour government policy with all too many unintended consequences for Whanganui."

The post was deleted on Friday and Hipango has been contacted for comment.

Decisions about where refugees resettle are made by the New Zealand Refugee Resettlement Strategy Senior Officials' Group made up of representatives from several Government departments.

Refugees first spend six weeks at the Māngere Refugee Resettlement Centre and don't move to their new home town until accommodation is secured.

Whanganui mayor Hamish McDouall said he was disappointed with some of the "xenophobic comments" he'd read after Thursday's announcement but acknowledged resident's concerns about housing.

"I totally understand that," he said.

"People shouldn't blame refugees for that," he said. "It's the fact that Whanganui is becoming more desirable for internal migrants."

McDouall said Housing New Zealand investment, building consent increases, new land being zoned residential and council's pending housing strategy would help all help ease the housing shortage.

"It's something we've got to work very hard at to make sure there's enough housing."

Council's Welcoming Communities advisor Katy Newton, who oversees the pilot programme aimed at making Whanganui a place which helps newcomers "participate fully in society and in the local economy", said a regular refugee intake would only benefit the district.

"All research points to refugees and migrants having a net economic gain," Newton said.

"That's through shopping in our shops and using the services that are here. But also it provides the opportunity for potential new businesses."

Newton helped work on council's recent housing snapshot report which revealed a shortage.

"It's at the forefront of al of our minds," she said. "But refugees aren't going to be coming here without a house and they are not going to be jumping the queue."

Newton said welcoming refugees was about Whanganui doing it's part "as a good global citizen".

"It should be seen as something positive and exciting and it's going to add richness to our community."