First Nations council leaders have renewed calls for the federal government to increase housing investment; warning overcrowding in remote communities is worsening and affecting health, education and wellbeing.

The Local Government Association of Queensland (LGAC) and First Nations mayors are urging the Commonwealth to commit $400 million in the upcoming federal budget to help Queensland's 17 First Nations councils begin critical housing construction.

Years of underinvestment have left many communities facing major housing shortages, with some homes accommodating more than 10 people in two- or three-bedroom houses.

Yarrabah Aboriginal Shire Council Mayor Daryl Sexton said housing shortages were creating health and social concerns for residents.

"Lack of housing and overcrowding means a lot of health worries for our community," Mayor Sexton said.

"We can see upwards of twenty people living in a single house which can create conflict within that family group. We have almost 400 homes - and that same amount on our waiting list."

Hope Vale Aboriginal Shire Council Mayor Bruce Gibson said children were among those being affected by overcrowding.

"The kids just don't have any space," Mayor Gibson said.

"It impacts their education, their ability to do homework, and their ability to be a child."

Palm Island Aboriginal Shire Council Mayor Alf Lacey said some homes were accommodating dozens of people.

"You can have up to 20 and 30 people living in a three- or four-bedroom dwelling," Mayor Lacey said.

"We need more affordable housing and delivery of social housing for our community."

Woorabinda Aboriginal Shire Council Mayor Terence Munns said more housing would support local growth.

"With our lack of housing we can't grow and we can't thrive," Mayor Munns said.

"More housing means more local jobs and would help grow our local economy."

The renewed call follows continued advocacy from councils and First Nations leaders, including an open letter released ahead of the 2025 Federal Election.

Torres Shire Council Mayor Elsie Seriat said improved housing was needed to retain residents and support communities.

"We need more houses for our people because people are moving away," Mayor Seriat said.

"We are looking to build over 250 homes. We just need the Government to walk with us so we can have real outcomes for our community."

LGAQ President Mayor Matt Burnett said overcrowding had reached critical levels across many communities.

"Overcrowding in First Nations communities has reached critical levels and without an urgent federal funding injection, the situation will continue to deteriorate," Mayor Burnett said.

"In Yarrabah, just south of Cairns, there are approximately 400 homes housing a population of almost 5,000 people, with other First Nations communities facing similar overcrowding.

"We're calling for at least $400 million over four years to be earmarked in the Federal Budget, enabling Queensland's 17 First Nations councils to kickstart crucial housing construction."

The former National Partnership Agreement on Remote Indigenous Housing ended in 2018, with councils saying no replacement program has been introduced.

LGAQ chief executive Alison Smith said housing shortages remained a consistent concern across remote and discrete First Nations communities.

"During the National Partnership Agreement on Remote Indigenous Housing when all levels of government were working together overcrowding rates decreased," Ms Smith said.

"Since the end of the agreement, overcrowding is again worsening and with it the negative impacts to health, education, and domestic and family violence.

"Councils have vast on-the-ground knowledge about the housing these communities need, and they can partner with the Federal Government to ensure it's delivered."