Premier Annastacia Palaszczuk says no government in the history of Queensland has invested more in social housing than her administration.

Over the next four years, her government is planning to deliver more than 7000 new homes to vulnerable Queenslanders who are priced out of the new housing market and are rapidly finding rental properties out of reach.

Following a concerted campaign by the Western Queensland Alliance of Councils to focus attention on chronic social housing under-investment, the state government will commit $2.9 billion, including $1 billion to establish a Housing Investment Fund to support long-term housing security.

The fund, according to Treasurer Cameron Dick, will be a co-investment model of public and private money, with $40 million in annual returns projected to be generated from the scheme.

The government is now on the hunt for property sector developers, institutional investors, and local governments to team up with the community housing sector to back the fund through an expression of interest process.

“We’re looking for proposals that go beyond just providing shelter – we’re looking for solutions that deliver new or redeveloped accommodation with access to health, education and employment services for vulnerable Queenslanders,” Dick said.

“Continued investment in economic and social infrastructure is key to driving economic recovery, resilience and future prosperity for Queensland.”

The announcement comes as new data shows rents are surging across Australia at an unsustainable rate, with the sharpest increases in regional areas, which spiked by 12.5 per cent overall.

The release of the plan also coincided with last week’s Local Government Association of Queensland (LGAQ) annual conference in Mackay, where councils called for a national housing summit to address the crisis.

Flinders Shire Council Mayor Jane McNamara said Queensland’s rural housing crisis was threatening to derail rural and remote economies, especially as many remain locked in a battle to remain viable following years of drought and population decline.

“The market has failed,” she said.

“Now we need to look to innovative solutions to counteract the impact of the crisis on our economies and communities.”

Councils specifically called for the state to work with them on modifying the first homeowners grant to allow it to be available for renovation of existing housing stock.

This would allow residents to purchase and live in affordable accommodation in rural and remote communities, council representatives said.

“We now need the state and federal governments to work with us on addressing supply issues in our regions – to ensure all Queenslanders have access to safe and affordable housing,” McNamara said.

LGAQ president and Sunshine Coast Council Mayor Mark Jamieson said the issue was affecting communities Queensland-wide.

“Councils and their communities across the state are being impacted by housing affordability and diversity challenges,” he said,

“There are communities facing shortages, rapid price rises and big dips in rental vacancy rates.

“We are uniting on their behalf with a strong message that this is an issue that cannot be resolved by councils alone,” he said.

Communities and Housing Minister Leeanne Enoch said the state government was also providing QuickStart Grants to community housing providers to accelerate construction of 2765 social homes, while the Help to Home initiative would provide 1000 additional private rental outcomes to support emergent housing needs over the next two years.”

Enoch said the Palaszczuk Government had already started 2779 social homes and more than 690 affordable homes since the release of its 10 Year Strategy in 2017.

“The release of this EOI will accelerate our efforts to house more vulnerable Queenslanders sooner,” she said.