You are not permitted to download, save or email this image. Visit image gallery to purchase the image.
The commitment would cost more than $4 billion, and would partly be funded by making Housing NZ borrow from third parties.
Housing Minister Phil Twyford has spoken of wanting to build 2000 state houses a year, though his party's election promise was to build 1000 more a year.
The Budget commitment will exceed that, at around 1600 state houses a year.
"The single most important thing the Government can do to solve the housing crisis is to build more affordable homes," Twyford said.
"The best way to tackle homelessness is to build more public housing."
Housing New Zealand will borrow up to $2.9b from third parties and invest $900m from its own operations for the new properties. It will also get an additional $234 million in operating funding.
There are currently 7890 people on the waiting list for a state house, and that is likely to grow because Prime Minister Jacinda Ardern has urged people in insecure housing to apply.
The total state housing stock is 61,338 houses. The new funding will lift that total by more than 10 per cent by 2022.
It is significantly more state houses than the previous Government had committed to, though National had placed more emphasis on growing the community housing sector.
The National-led Government had planned to build 13,500 new state houses over ten years. But that would have been done by replacing or demolishing 8300 existing properties, for a net gain of 5200 in ten years.
That means the Labour-led Government will be building nearly 1100 more state houses a year than the previous Government.
The number of emergency housing places will be lifted by 200, to 2155 places, at a cost of $69m in capital funding in the next year and $101m in operating funding over four years.
Homelessness and affordable housing
As previously announced, the Government will put $100m towards homelessness initiatives, including ongoing funding for the Housing First programme and an expansion of the programme beyond urban areas.
Another $2b was committed in a mini-Budget in December to fund the construction of 100,000 affordably-priced homes over 10 years.
Another $142m over four years has been committed to extending a scheme which gives homeowners grants to insulate their homes.
That is slightly more than the previous Government, which had planned to spend $34m over the next year on insulation grants.
The new funding comes after the passage of the Health Homes Guarantee Bill, which will require landlords to upgrade their insulation to modern standards.
Energy Minister Megan Woods said too many New Zealand homes were cold and damp, and around 42,000 children were hospitalised a year with infectious or respiratory conditions caused by poorly insulated and heated homes.
The initiative is part of Labour's confidence and supply agreement with the Green Party.
In its first year, the programme will focus on insulating homes. In the second year, it will focus on improving heat sources.