The Wellington and North Shore City councils have become the first to sign up to the Government's leaky homes rescue package.
The package would see the Government and councils contribute 25% each to the repair costs, with homeowners paying the remaining 50%.
There are an estimated 89,000 New Zealand built that are not watertight. Due to problems with their design, building materials and construction, these homes leak when it rains.
Owners of leaky homes still have the option to take legal action, as the scheme is not mandatory.
At full council meetings on Wednesday night, the councils voted unanimously for the plan.
The Wellington City Council says it had no other option but to support the package. It says that if it did not, it would be liable for total repair costs which would come at an even greater cost to the ratepayer than the Government's scheme.
Wellington mayor Kerry Prendergast did not take part, as she owns an apartment which is being investigated for leaks.
On Thursday, the Christchurch and Auckland City councils will decide on whether to support the rescue package.
Wellingtonians could face rates rise
Wellington City Council's bill for leaky homes could force a rise in rates.
Green Councillor Iona Pannett says leaky homes need to be fixed, but the high cost means other projects may be compromised and there may have to be a rates increase.
Deputy mayor Ian McKinnon estimates there are about 2200 leaky homes in Wellington.
If 70% of the them opt into the scheme, the council's bill would be $61 million - a sizeable portion of its $350 million operating budget, Ms Pannett says.
However, Mr McKinnon says if homeowners choose to take legal action, they will have less certainty and could end up paying more.
