The Government has announced it will begin selling off up to 1600 state houses in Tauranga and Invercargill to social housing groups.
There are 370 state houses in Invercargill and 1250 in Tauranga and it's understood all of them could be sold if buyers come forward.
Only vetted and registered community housing providers will be able to buy them and, depending on their negotiations with the Government, they may not have to pay the market price.
Tenants will be able to stay in homes that are sold, and the properties will stay as social housing unless the Government decides otherwise.
Once bought the properties will have to stay as social housing unless the government decides otherwise.
Labour's housing spokesperson Phil Twyford said both Invercargill and Tauranga had housing problems but National's policy would not change that.
Mr Twyford said he hoped the process would not cause needless stress for families in State houses.
The Government plans to sell up to 8000 state houses to community groups by 2017 and up to 2000 of them this year alone.