Break O'Day Council and community housing provider Centacare Evolve Housing have plans to build eight social housing units at Fingal.
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According to the council, there are more than 100 applicants on the social housing wait list in the municipality and Mayor Mick Tucker said this was an issue he took very seriously.
"There is a need for more housing across the state and our area is no different," Cr Tucker said.
"These people are already part of our community and we will do all we can to support them in finding reliable and suitable housing for our communities."
A previous proposal for eight units at Scamander was abandoned after residents in the coastal town complained in 2019.
The current proposal is to construct the housing on unused council land, which a council spokeswoman said would be the most "valuable and responsible" way to utilise the land which was surplus to requirements.
Services like a supermarket, recreation ground, post office and the Fingal Valley Neighbourhood House are also close to the site, according to the spokeswoman.
The mayor said he hoped the small, close-knit community at Fingal would unite to support the new residents when the project was complete.
"Fingal may be a small community, but they are a real country township that has a strong community focus - they support each other and band together," Cr Tucker said.
Centacare Evolve Housing chief executive Ben Wilson said the housing provider and the council were committed to working with one another to improve housing availability in the municipality.
"Centacare Evolve Housing is committed to increasing the supply of homes in the region in partnership with Break O'Day Council," Mr Wilson said.
"We have been working in collaboration with Break O'Day council for some time after they have identified the demonstrable need within the Break O'Day local government area."
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