Hertsmere Borough Council will receive £1.3m from the Government as a reward for building new homes in 2014.
The authority, which covers Potters Bar, will be given the cash as part of the New Homes Bonus.
The bonus is a grant paid by the Government to local councils for increasing the number of new builds or conversions of long-term empty homes in the area.
By matching council tax raised from new properties, councils will have more cash for further developments.
Cllr Harvey Cohen, who is responsible for planning and localism, said: “This is a great example of localism as work, keeping local decisions and money local, which best serves our communities.
“We can decide how to spend this money through consultation with our residents; it’s not earmarked in any way other than to provide services and facilities, especially within areas where housing stock has increased.”