The council recently agreed to spend about $650,000 on the first stage of urgent improvements to its 98 unitsbut consultants say upwards of $3.5 million will eventually be needed to bring them up to acceptable standards.
It was looking to the Government for help.
The Government has a housing innovation fund available to councils upgrading their housing stocks but a recent letter from Housing Minister Maryan Street seemed to quash any hopes Clutha may get any money soon.
Ms Street said the $12 million in the 2008-09 fund was already committed and the Housing Corporation already has projects worth more than $50 million registered with it.
"As a result, over the past two years, the corporation has prioritised the funding of these projects to ensure those meeting the highest levels of housing need are funded first."
Once the Clutha council is registered - which has now happened - the corporation works with it to develop a proposal and explore other funding opportunities.
"I am sorry that I cannot offer you [the council] more encouraging news at this time. While Clutha District Council will not receive funding this year, this is not a reflection of a lack of commitment by the corporation. The corporation will continue to support your project in any way it can," Ms Street wrote.
