The first stage of a $320 million upgrade of the Wellington City Council's social housing stock began on Thursday with work starting at 24 units in Newtown's Te Ara Hou flats.
The programme is a joint initiative between the council, which is contributing about $100 million, and the Crown. More than 2,000 council units in the capital are to be refurbished over the next 20 years.
The upgrade will be completed in stages to allow affected residents to be moved into alternative accomodation.
Wellington Mayor Kerry Prendergast says many of the council flats are small, cold and dilapidated, and the tenants deserve better. She says Te Ara Hou site upgrade should be completed in less than a year.
However, some Te Ara Hou tenants fear they will not get their flats back if they move out during construction.
Resident Rosalina Ngakopu says most tenants are excited by the upgrade, but some are worried the flats will become so popular they will lose them.
Ms Ngakopu says most of the children in Te Ara Hou flats attend schools close by and parents are worried they will have to change schools if they cannot move back there.
Housing Minister Phil Heatley says the project sets the scene for the Government to upgrade state housing within the next few years.
He says many state houses are in serious disrepair, with tenants living in unacceptable conditions.