London will receive $1.6 million to build new affordable housing that can accommodate 39 dwellings, the first wave of funding local officials hope will build 500 new housing units in the next year.

The cash from the federal and Ontario governments was announced yesterday by London West MP Ed Holder and MPP Chris Bentley, the province's attorney general and senior cabinet member. "When you don't have a house or a place to live you don't have dignity," Holder said at a media conference also attended by London-North-Centre MP Glen Pearson, London-Fanshawe MP Irene Mathyssen and London city councillors Susan Eagle and Harold Usher.

While more funding is needed and planned for affordable housing, this project in London, planned for Southdale Road, can mean the world for each family that benefits, Bentley said.

"This can be a life-changing experience," he said.

London taxpayers are picking up a share too -- $685,000 --and Eagle says its well worth the investment.

When people lack housing, taxpayers end of footing the bill for more shelters, social services, policing and heath care, she said.

"Canadians recognize the need for affordable housing. It's no longer a polarizing issue," Eagle said.

From 1993 to 2003, there was virtually no affordable housing built, creating a shortfall in London that nine years ago was estimated to be 14,000 units, she said.

Since then there have been about 1,000 units built and London hopes to build another 500 with its share of $1.2 billion expected to be rolled out in Ontario in coming months by senior governments.