Housing New Zealand is halving the weekly rent of anyone living in a state house in Canterbury with limited or no sewerage service.
About 140 households in Avonside and about 20 in Kaiapoi will also be refunded half of any rent they have paid since the earthquake on 4 September.
The state housing agency says tenants have the option of moving out if they want.
Christchurch City Council, which is the country's second largest housing agency after Housing New Zealand, says all its tenants are in areas with functioning sewage systems.
It is in the process of rehousing 64 residents whose homes were deemed uninhabitable. They are not paying rent while they stay with friends or family.