All former residents of the botched Bella Vista housing development in Tauranga will join a class action against the Tauranga City Council.
The council has offered to buy back the unliveable properties at the price buyers paid for them up to three years ago.
But residents said this will lock them out of the current housing market.
The former residents were evacuated from their newly built homes in March after they were deemed unsafe to live in.
Two households are already pursuing legal action against the council, which signed off on shoddy construction work.
The remaining 19 families will now join them.
Last week, the residents said the council's offer to buy back the properties at the price paid would leave them broke and force them out of town.
Lee Konowe said there is no reason the council cannot front up with more money, when most of it will be coming from insurers.