Italian police have arrested a conservative Catholic politician who allegedly forced needy young women into sexual encounters by promising them public housing in return.

Ivo D'Agostino, a city councillor in Chieti, in the central Abruzzo region, has been placed under house arrest following a police operation dubbed 'Sex for Houses'.

Chieti prosecutor Lucia Campo alleges that the married father-of-four abused his public position to lure five women into having sex inside the city council premises.

D'Agostino, 51, a member of the Christian Democracy spin-off party UDC, faces extortion and sexual assault charges.

His alleged lustful extortions were exposed by a Caribbean woman who told police the councillor forced her to have sex under the promise to speed up her application for a flat.

Police soon discovered that another four young women - Romanian, Polish and two Italians - had been the subject of similar promises by the councillor, who was in charge of social housing services and other departments including health and traffic.

"We simply followed up the loud cry of five women," police spokesperson Francesco Costantini told reporters. "Some of them couldn't find the strength to report the crime because D'Agostino grinded them down, taking advantage of his position."

The abuses allegedly started in 2011; D'Agostino has been a Chieti Councillor since 1993.

D'Agostino has been suspended by his party and also by Chieti Mayor Umberto di Primio.