However, government has increased the councils' borrowing limit by £190,000.
Camden Council originally bid for an increase of £29.5m for eight schemes starting in 2015/16 to provide 120 homes.
Only one scheme was approved, meaning the amount received will provide the equivalent of only two extra homes in the borough.
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Councillor Theo Blackwell, Cabinet Member for Finance and Technology Policy, said: "I'm bitterly disappointed that the government has decided Camden warrants only an additional £0.19m to our Housing Revenue Account cap when we're a central London Borough screaming out for more affordable housing.
"This is another example of how Camden is constantly having one hand tied behind its back when trying to provide additional social and affordable housing for its residents, whilst at the same time being told by central government that targets need to be met."
(CD/MH)
