More than 2,000 units of dedicated rental housing will be built in the Capital Regional District in a bid to end chronic homelessness in the area.

On Thursday, representatives from the federal, provincial and regional governments announced the $90-million partnership they say will provide hundreds of homeless people a place to call their own.

The funding will pay for more than 1,000 affordable housing units as well as 400 shelter-rate units that will be rented for only $375 per month without any ongoing subsidies.

Officials on hand for the announcement said it's a significant investment they hope will make a dent in the region's rental housing crisis. Victoria currently has a rental vacancy rate of just 0.7 per cent, according to the Canadian Mortgage and Housing Corporation.

"Thanks to today’s investment and our collaboration with partners at the provincial and municipal levels, we’re going to make homelessness history in Victoria," said Jean-Yves Duclos, the federal minister of families, children and social development and the minister responsible for the CMHC.

"In Canada’s first-ever National Housing Strategy, our government made a commitment to reduce chronic homeless across the country by 50%, and to work with partners at all levels to give more Canadians a place to call home. Today’s announcement shows those two pillars of the strategy in action."

CRD Board Chair Steve Price called housing affordability a "critical issue" in the Capital Region and said the district is "thrilled" that all three levels of government are delivering on promises to reduce homelessness.

The announcement took place during the official opening of Seim Lelum, a 41-unit affordable housing complex on Gorge Road East for Indigienous people at risk of becoming homeless.

Phase 1 of that project saw a former motel converted into 26 units of affordable rental housing, then later expanded with a 15-unit standalone building.

The federal government's National Housing Strategy has committed more than $208-million over five years to housing projects that use new funding models and innovative building techniques that help lower costs and risks of such projects.

Its objective is to reduce what it calls "chronic homelessness" in the country by 50 per cent.