Hackney Council has been given £36,000 from the Community Housing Fund to solve the London borough's housing crisis.
The government allocation was criticised as "laughable" by Hackney South and Shoreditch MP Meg Hillier.
“Average prices in the borough are well over half a million pounds,” she told the Hackney Gazette. “Rent is soaring, with overcrowding and demand for social housing the highest seen in 20 years.
“What is the minister’s response? To allocate Hackney £36,740. This is a laughable amount.
"In contribution to Hackney’s housing problems this won’t do anything.”
A letter sent to the MP said the funding was intended to "boost delivery of community-led housing".
The newspaper points out that the average price of a home in Hackney is £732,500, according to Rightmove.co.uk, an increase of 13 per cent from last month.
Hackney Council did not respond when approached for comment by The Independent.
The news comes as homeless people looking for affordable housing in London's richest borough could be sent as far away as Birmingham.
On Friday, Westminster council approved a wave of homelessness policies including potentially housing families in Midlands cities such as Leicester, Coventry and Peterborough.
Between 2012 and April 2015, Westminster council only built 12 per cent of the affordable housing it was supposed to – the fourth worst record in London.
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