The Government will invest $82 million to help Māori housing providers build nearly 200 rent-capped homes, with construction expected to begin within a year.

It comes as the coalition shifts towards supporting community housing providers instead of scaling up the state housing agency Kāinga Ora. All the homes will be affordable rentals where rent is capped at 80% of the market rent in a particular location.

Supported by funding administered by the Ministry of Housing and Urban Development, the providers will create a "total of 198 whare in areas where there is a high demand for affordable housing. The aim is to start building within the next 12 months".

Eight of the 12 projects are located within the "priority locations" of Northland, East Coast, Hawke's Bay, Taranaki, and Bay of Plenty including Rotorua and Waikato.

The others are in Nelson, Ohakune, Taumarunui and Masterton where the "proposed developments demonstrated a significant need for supply and affordable rentals or had a strong focus on exiting whānau from emergency housing and transitional housing".

Associate Housing Minister Tama Potaka said: "These developments are happening against a backdrop of severe housing deprivation in the regions where they are located and where there is an acute shortage of quality and affordable rental accommodation.

"The developments announced today are not just about building houses.

"Each of these homes represents a fresh start and a secure foundation for whānau and tamariki to grow, thrive, and stay connected to their whenua in a community where the need for safe, affordable home has never been more urgent."