The Victorian government announced in Sunday that it would spend $5.3 billion on 12,000 public and community sector homes over four years in a pandemic-busting package funded through the upcoming state budget.

Haven; Home, Safe chief executive Ken Marchingo said he had spent 30 years helping people with nowhere to live.

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"To put all this in perspective, in the aftermath of the Global Financial Crisis the federal government put about $5 billion dollars into social housing across the country and everyone in the sector was over the moon with how much money was being spent," he said.

"This is $5 billion just for one state. So it's hard to find a superlative for describing it. It's gargantuan."

The government hopes its new spend will drive up public housing stock by 10 per cent and guarantee 10,000 jobs a year in a short-term boost to an economy hobbled by the pandemic.

It has predicted as many as 18,000 people will be working on the construction blitz at its height, with an overall $6.7 billion in economic activity.

The government's announcement prompted member for Northern Victoria Wendy Lovell to call for the state government to make sure the greater Bendigo area received a major share of funds.

The Liberal party member said she was concerned about a rise in families "languishing" on social housing wait lists.

Ms Lovell said she was initially excited by the government's announcement. However, she was concerned that only 25 per cent of the new funds would go to regional Victoria.

Ms Lovell said regional Victoria had 37 per cent of the total number of families on a priority waiting list.

The government plans to set aside 2000 new builds for people living with mental illness and 2900 for people to move closer to where they work.

The government says the new funding will also help Aboriginal Victorians, pensioners, people with disability, family violence victims and single parent families find their feet.

A new government agency called Homes Victoria has been established to deliver the project.