Christchurch City Council will help fund a project with the City Mission and the Government to address emergency housing needs in Canterbury.
The Family Emergency Accommodation Project is aimed at assisting families as they transition from temporary to more permanent homes.
The project will cater for high-priority families such as those on benefits or earning low wages with children, who are homeless. They might be living with relations and friends, in cars or on the street.
Councillors have agreed to put $92,000 towards the scheme, nearly matching the Government's pledge of up to $100,000.
A part-time social worker would also be employed to help families with social and lifeskills.
Councillor Glenn Livingstone said the project will initially provide three housing units, with plans for 40 more.
"We've had a representative from the Ministry of Social Development come back and talk about a Request for Proposal which they have going out at the moment for 40 units."