A "scrambled" attempt to address the housing crisis on the eve of today's Budget is a start, but not enough, says a man whose family had to sleep in their car on Tuesday night.

Social Housing Minister Paula Bennett announced in Parliament yesterday that homeless families would be offered up to $5000 to move to empty state homes outside Auckland.

The policy was put together in the last few days and was announced yesterday afternoon as the Government goes into damage control over its handling of housing problems in New Zealand.

Ms Bennett told reporters at Parliament that up to 150 families could be relocated to state houses or possibly private rentals through the policy.

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"I would say to those that are homeless that there is a chance that they could get a house in days if they were willing to look outside of Auckland."

Tony Lepage, who spent Tuesday night in his car after being turned away by full-up emergency housing agencies, said the policy should be helping many more families. "It's a step in the right direction. But if she's making an offer to only 150 people, I'd say ... it needs to be 1000."

Mr Lepage was offered a state house late yesterday, hours after the Herald reported his plight online.

Ms Bennett said that the maximum $5000 grant was mostly targeted at people who were already in state houses, but homeless could also get access to financial assistance "if that is what is needed".

Last night, it emerged that Housing New Zealand had more than 2500 empty houses on its books at the end of March but only 201 were ready for people to move into.

The developments came as more stories emerged of people sleeping rough in Auckland.

Te Puea Marae in Mangere Bridge opened its doors to the homeless, and in Papakura a mother is organising residents to feed families living in a local park.

Amy Lorigan -- whose 2-year-old daughter died a violent death four years ago -- and her partner are taking hot food and soup to up to 20 homeless people who have been sleeping in their cars at Bruce Pulman Park.

Huntly, Ngaurawahia, Hamilton, Whanganui, Gisborne all had vacant state houses available. Any relocation would be strictly voluntary, Ms Bennett said.

Auckland's state houses were 97 per cent full and most of the vacant properties were unusable because of methamphetamine contamination.

Around $750,000 had been set aside by the Government for this purpose.

The relocation policy was already being considered by the Government for state house tenants.

But Ms Bennett confirmed yesterday afternoon that it would be expanded to make homeless people eligible.

The size of the grants was also dependent on how far they had to travel and how large their family was.

The Government has already announced $41 million for emergency housing in the Budget.

But it remained under pressure to control the housing market and address homelessness.

Paula Bennett told reporters at Parliament that up to 150 families could be relocated to state houses or possibly private rentals through the policy. Photo / Mark Mitchell
Paula Bennett told reporters at Parliament that up to 150 families could be relocated to state houses or possibly private rentals through the policy. Photo / Mark Mitchell

A new poll released last night showed that most New Zealanders felt the Government was not doing enough to fix housing problems.

As hinted by Prime Minister John Key yesterday morning, the Government would also bring forward grants for homeless people to be re-housed in temporary accommodation.

The grants were scheduled to be introduced in September, but would now be introduced in July.

Asked whether the two changes were a result of public pressure on the housing issue, Ms Bennett said she had never been comfortable with the September deadline for the accommodation grants.

"Certainly the thought of people being really stuck over all of winter is just not tenable," she said.

The relocation policy was "one that I had thought of in the last week", she said.

Finance Minister Bill English did not know of the policy announcement on his way out of question time.

"The minister has a fair bit of discretion about how the appropriations work with respect to social housing," said Mr English, also Housing New Zealand Minister.

"I wasn't aware of the announcement today, but that's not a big deal. There are a lot of announcements that happen that I'm not aware of.

"The Budget covers a very wide range of the services that New Zealanders need, and I wouldn't expect to be on top of the detail of every one of them."

Labour leader Andrew Little said the announcement was a "desperate, last-minute bid by a government on the ropes of the housing shortage".

"The Government has been so out of touch for so long on chronic housing problems, now they have suddenly woken up the day before the Budget and realised they've completely missed the boat, and they'd better look as if they're doing something."

Green Party co-leader Metiria Turei said the policy may work for a handful of families, but that number was a tiny minority of people in desperate need of a home.

"The minister has scrambled this together, because she is under so much pressure, and rightly so...it is another short-term, half measure."