The Labour Party would allow up to 1500 new starter homes to be built on publicly-owned land over the next four years.
The Home Ownership on Public Estate scheme, or HOPE, would see modest-income families build and own houses on land that would remain state-owned.
Labour leader Helen Clark says the scheme would initially be put in place in Auckland, where a significant number of Crown-owned sites have already been identified.
She says the cost of the land for a starter house tends to be about $145,000.
Miss Clark says if the Crown continues to own the land, a family could build and get into a starter house for about $165,000.
Houses built under the scheme would be able to be sold, with the Crown continuing to own the land, while rates would be the responsibility of the homeowner.
National party leader John Key says his party's Gateway Programme is similar, offering first home owners the possibility of paying only for the house at first, and the land at a later stage.
Mr Key says National would tackle other factors to make housing more affordable such as reducing costs through reform of the Resource Management Act and the Building Act.