Tauranga needs more state housing - but Housing New Zealand is not providing it, the Tauranga Housing Trust warns.
The comment comes as figures show Housing NZ has terminated 312 tenancies in the past financial year after investigations found the tenants had obtained a state house or taxpayer-subsidised rent by lying about their circumstances.
Seventeen evictions were in the Western Bay of Plenty.
Chris Johnston, Tauranga Community Housing Trust chairwoman, said: "It seems to be harder for people to get into a Housing NZ property.
"I think we've got more of a demand than there is supply for social and community housing, particularly one and two-bedroom houses.
"Of course it's of concern if people who require housing can't get it, and other people who no longer require the support are accessing state housing," Ms Johnston said.
"I imagine that's what they're trying to address at the moment."<inline type="recurring-inline" id="1003" align="outside" enforce-sites="no" />
Housing Minister Phil Heatley said a skilled team of investigators had been detecting and dealing with tenants who were deliberately ripping off the system.
The freed-up HNZ properties had helped people who genuinely needed a home.
"A state house is not an automatic entitlement, and people who deliberately lie about their circumstances are depriving families in real need and receive benefits that they are not entitled to," Mr Heatley said.
The HNZ investigations revealed tenants failed to declare their income from employment, business interests or assets, or they lived with a partner or sublet their tenancy.
A Dunedin couple running an escort agency from home were among the 312 tenants evicted after lying about their income so they could stay at the property.
Mr Heatley said they were part of a minority who "took the mickey out of the system".
The couple were prosecuted for income-related fraud, sentenced to 100 hours' community work, 12 months' supervision and ordered to repay $7500.
Mr Heatley said just 1 per cent of HNZ tenants were rorting the system. It cost the Government $2.4 million a year to run the investigations unit.
Since July last year Housing NZ has prosecuted 120 tenants for fraud. Sentences for the 120 people convicted included prison sentences (three), home detention/community detention (42), community work (45), reparation only (five), convicted and discharged (four) and awaiting sentence (21).
By the numbers
312 evictions nationally in the past 12 months, 241 in 2011 and 114 in 2010.
120 HNZ tenants prosecuted for fraud nationwide in the last year.
17 evictions were in Western Bay of Plenty
137 people on a HNZ waiting list in Tauranga/Rotorua as of last month.