Housing New Zealand is axing a service which has worked with other agencies to find private rental homes for people who can't get state houses.
The personalised service will be replaced by giving people contact numbers for local private rental agents and social services such as Work and Income.
But a South Auckland private rental agency which has worked with the corporation to house people, South Star Rentals, says the change will leave some of the country's most vulnerable families homeless.
"A lot of them don't have a head on their shoulders to be able to deal with a private sector landlord," said South Star agent Lisa Loader.
"It's not the mums and dads that I'm concerned about so much, but I worry about their kids. It's a huge contradiction to [Social Development Minister] Paula Bennett's green paper on children. If these guys can't get housing, how the hell can they protect their kids?"
Three years ago, Ms Loader appeared in a Housing NZ video promoting what was then its new "options and advice" service.
Housing NZ chief executive Lesley McTurk said in the video the corporation could house only one in every four people seeking a state house.
The new service aimed to help the other three find private sector housing.
The video showed Housing NZ staff liaising with Work and Income to find out what help that agency could give each family towards paying a bond, rent in advance and ongoing accommodation supplement.
The Housing NZ staff then referred families to Ms Loader and other private agents with all the details they needed to pay the bond and rent.
Ms Loader told the Herald that most of the clients referred from Housing NZ were beneficiaries who were hard to place.
"Most of them have terrible rent records, most of them have been evicted, and I've had a few that have come straight from prison," she said.
Two weeks ago, she took a referral for Stace Williams, a 33-year-old father of children aged 5 and 6 who was living in a car.
Mr Williams had just broken up with his partner in Ruatoki, in the Bay of Plenty, and driven back to Manurewa, where he grew up.
"I came back in the middle of the night, ran out of gas, and parked up outside Housing NZ. Me and my two kids slept in the car that night," he said.
He applied for a state house the next morning and was told there were none available.
"I was able to stay at certain homes but they could only take my kids and I was sleeping in the car," he said. "The car was deregistered, with a cracked windscreen and a false plate on it.
"I was very desperate and ended up coming back [to Housing NZ] a week later after staying here, there and everywhere."
He was referred to Ms Loader, who found a three-bedroom house for him at $330 a week within an hour.
"But she said she only took the referral because Housing NZ had done the groundwork.
"If he had phoned me I would have been a lot more hesitant if Housing NZ hadn't liaised," she said.
Dr McTurk said last September that the corporation was ending all its social services and would concentrate on its "core function" of managing state houses.
Housing NZ tenancy services manager Kay Read said the corporation was cutting back services in Manurewa to the same level provided elsewhere.
"As part of our options and advice service, what we have provided in a small number of locations like Manurewa is a function where as a result of talking to the customer, a referral has been made to a private sector rental agency, if this has been an option identified that could meet a particular customer need," she said.
"This function has been a limited and supplementary addition to a standard service provided by Housing NZ.
"For people not eligible for a state house, we provide information and advice about the types of housing assistance and options available to them beyond state housing.
"This information will include contact details for private sector letting agencies in the person's local area, as well as advice on other social support agencies that can provide assistance, for example Work and Income could provide financial assistance with bonds," she said.
NEED A HOUSE?
* More than 8000 households were allocated state houses last year (including transfers).
* About four times that number came into Housing NZ needing a dwelling.
* Many of those who missed out were helped into private rentals.
* They will now get only a list of contact numbers.