The average house price in rural areas is £250,000, yet the average salary is only £21,000 a year, meaning many local people struggle to get on the housing ladder.
Communities Minister Andrew Stunell said he wanted farmers to identify disused farm buildings that could be converted into new affordable homes for local people.
Rural councils to look favourably on their planning applications, he added.
Mr Stunell highlighted a Harrogate Borough Council scheme that requires developers to make provision on the site for affordable housing, resulting in 34 extra affordable homes across 19 sites.
Other rural councils could learn from Harrogate's example, he said. Theu should work with their communities to deliver the homes they need.
Harrogate's approach is in the spirit of the "Home on the Farm" idea, championed by Mr Stunell, which promotes conversion of disused farm buildings into new homes.
"Councils and rural communities need to think innovatively and outside the box to make sure they deliver the homes they need.
"The work by Harrogate Borough Council shows what can be done when a local authority thinks imaginatively about its affordable housing needs, and uses all the powers they have at their disposal."
Measures announced in the government's Housing Strategy - the New Homes Bonus, FirstBuy, plus Neighbourhood Plans on the way from April 2012 - meant councils had more tools to get the job done.
Harrogate councillor Jean Butterfield, the council's cabinet member for housing, said the rural building conversion policy was a practical way of bring redundant buildings back into use as much-needed homes.
"Barn conversions can make extremely large high-value houses. Our policy encourages a more flexible way of looking at these buildings, creating more types and size of house including affordable homes for local people.
A total of 34 affordable homes associated with rural building conversions had been delivered on 19 sites with four more more under way.
"Every rural affordable home added to our stock is desperately needed and helps local people to stay in communities where they work or where they grew up."