The number of overcrowded homes in the region has jumped sixfold in two years as the Government sells off state houses, the Green Party says.
The Ministry of Social Development released figures on Monday which showed the number of Napier and Hastings households identified as "at-risk" and "having a significant and persistent housing need that must be addressed immediately" had risen from 13 in March 2012 to 80 in June 2014.
Green Party co-leader Metiria Turei told Hawke's Bay Today the figures referred to overcrowded homes, which had increased significantly in Hawke's Bay in the past two years.
"It's multiple families in the same house, people living in outhouses or in cars ...
"It's a range of housing crises that people are put in.
"More and more New Zealand families are finding it impossible to meet their basic needs - one of which is housing."
Ms Turei said one of the factors contributing to the crisis was an insufficient stock of state houses. "The Government is losing more Housing New Zealand properties than it is building them ... We need to significantly increase the number of properties built."
An Onekawa woman who wished to remain anonymous told Hawke's Bay Today she was living in a four-bedroom house with 10 people, including her 10-month-old daughter.
The overcrowded environment was "stressful," and it was difficult for her baby to get any sleep.
"Me and my baby sleep in the lounge."
The woman, 24, desperately wanted her own space and had first applied to Housing NZ in October last year, but it was difficult to meet Housing NZ's eligibility criteria.
"They expect us as appliers to find a private [house] or go through real estate before even being eligible for the vacancies.
"I'm a solo mum that wants a decent long-term home and Housing NZ just don't give a damn."
Tukituki National MP Craig Foss said while some Housing NZ properties had been taken out of circulation, "the investment is no doubt going on".
Rather than increase Housing NZ's stock, the Government was focussed on refurbishing and relocating existing stock.
"The housing stock we inherited was pretty run-down and tens of millions have been spent doing them up."
Asked if he thought Housing NZ's eligibility criteria had been made more stringent in the past two years, Mr Foss said: "No I don't."
"Most Housing NZ tenants are very good.
"But we have certainly increased the enforcement of the rules for those who abuse their Housing New Zealand property."
Mr Foss said he thought the increase in overcrowded households in the region "might be a seasonal blip".
"We've got to remember that some families actually like having a large number under one roof and the stock has got to accommodate that."
Tukituki Labour candidate Anna Lorck said the region was in the midst of a housing crisis as the Government sold off Housing NZ's stock.
"I believe the Government is engineering a so-called surplus [of state houses] by setting eligibility criteria so high that many families are ineligible."
Ms Lorck said the empty state houses were then sold for profit.
"They [the Government] are stripping the regions of their state housing assets."