Whangarei families are being forced to share homes with other families, live in garages and in damp and mouldy houses, causing a raft of health problems in children.
Applications to Habitat for Humanity Northland for its home ownership scheme, the Metra Big Town Build, show a serious housing need in the city, says executive officer Conrad LaPointe.
"The applications reveal people living in overcrowded situations - two families to one house and one family living in a garage," he said.
"[They] are living in very unhealthy homes. A number of people have expressed that they can't live in all the rooms in their houses because of all the excessive condensation and mould."
He said this was causing illness such as bronchial infections, asthma and rheumatic fever, particularly in younger children.
Common issues included complete lack of, or very poor insulation, no passive ventilation, poor maintenance and being situated wrongly on the site, he said.
All applicants were currently renting, 80 per cent privately and 20 per cent through Housing New Zealand, in areas across Whangarei, he said.
"While we appreciate there is a responsibility for the household occupants to help maintain their home, the issues of overcrowding in these places also exacerbates the problem."
Habitat has had 60 expressions of interest for one house and has already received nine completed applications before the November 14 application closing date.
"The majority of applications have come from working families on a low income, who would like to get out of their current accommodation, but just felt a hopelessness that it was never going to happen," Mr LaPointe said.
"From our work over the years, these sort of situations are commonplace. A conservative estimate from the Rural Housing programme was that there are 7500 households in Northland that needed to be repaired and maintained up to a liveable standard."
Mr La Pointe said the average home price was more than eight times the average wage in Whangarei, at around $250,000.
He said home ownership had become an impossibility for people.
The Metra Big Town Build is a home ownership scheme for a low-income family currently living in unsuitable accommodation, where Habitat offers a rent-to-buy scheme.
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