A total of twenty new social housing units are expected to be constructed in Dubbo, with $5 million of the funding earmarked for constructing 12 unit developments and eight 'new generation' studio units.

While the new homes are still currently being designed and have not received planning approval, Dugald Saunders MP said the housing units would be vital in providing housing assistance to some of the most vulnerable members of the community, namely older women and other groups at risk of homelessness.

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"By funding the development of new social housing in rural and regional areas, we can ensure local trade businesses are used, people are employed and the local economy receives the vital boost it needs.," Mr Saunders said.

Dubbo has had its problems with social housing estates over the years with some residents ruing the high crime rate in areas like Alcheringa Street.

One such resident, Eric Satchell, has struggled with the destruction of property near his housing on Alcheringa for a long time, and says some of the current housing still sits empty due to damage.

"There's four empty in my street, they've just done them up because they were all smashed in," Mr Satchell said.

"They could be using those ones first, but I've always said that anyone who wants public housing should fulfil some sort of trial period first to make sure they can look after their home."

Mr Satchell was sceptical that some of the problems social housing in Dubbo has sought to address would be rectified with more houses alone.

"I'm all for giving people houses if they look after them is the thing, but we're still having trouble in my area."

The funding for the projects was secured via the sale of ageing and no longer suitable properties located in the Millers Point area of Sydney.

The commitment comes as part of the broader Communities Plus Building program which is targeting the completion of 23,500 similar dwellings throughout NSW across the next ten year period.