Facing a surge in house prices and homelessness, Lower Hutt has committed $1.5 million over three years to help vulnerable families, but the city's Mayor wants the government to step up.
The city is issued half the Wellington region's emergency housing grants despite it having only 20 percent of the population.
Mayor Ray Wallace said work had been underway for the last year to better understand the crisis.
Funding approved unanimously on Tuesday by the council would help those already identified by government agencies and social services as vulnerable, and it was not just for those already out on the street.
"We will also have people that recognise that they're in an unsafe situation or potentially a situation that's going to see them out on the street - they will be able to come to us," Mr Wallace said.
"We're going to have an advocate that will then work with them, with the private sector, with private landlords or with government agencies to get housing."
He said the funding was mainly targeted at families.
"It will go towards - not so much those who are directly homeless on the streets - we're more talking about families that are in overcrowded, unacceptable, unsafe situations.
"What this will do is ensure we try and find them better accommodation."
It would also assist families that were in private rental and at risk of losing their property.
Mr Wallace said the council formally committed to continue lobbying central government for support.
"We have a role to play and we are certainly playing that role, but we definitely feel the government needs to be doing more in this area as well."
He said renters and buyers from Wellington city were moving out to places like Lower Hutt, Upper Hutt and Porirua.
"We're seeing far more people coming into Lower Hutt, which is not a bad thing, but it is putting pressure on the housing market.
"We're seeing the highest prices ever paid in history for rentals. When these landlords are having their open day for a property sometimes they're having up to 50 families turning up."
He said the council was looking to make changes to its district plan which would allow more houses to be built.