Housing New Zealand spokesperson said they were continually housing new families and in the last 12 months 170 were housed.
"We have a strong commitment to Maraenui and are one of three partners to a Memorandum of Understanding with Napier City Council and Te Roopu a Iwi Trust.
"We want to make the area vibrant and health and part of this is looking at how we can increase the different types of housing so there is a better mix, including affordable home options."
Moteliers in Napier also said it was the worst they had seen and wondered what these people would do over the summer months when tourists booked out the motels.
Ace Motel manager, Frank Craig, said there were empty sections, which could easily fit two state houses on each.
"Housing New Zealand and Work and Income just need to work together to find a solution," Mr Craig said.
New Napier City Councillor, Apiata Tapine, said they had been working with Ministry of Social Development and the local iwi to find a solution.
"It has been taken to a new level and we are just working with MSD to get a better handle of numbers and the size of the problem."
He said the local Marae's are keen to help but they are like hotels and have bookings to honour.
"Once MSD get back to us we will have a better understanding of what we can do and form a solution. I think everyone has understood the urgency."
Ms Boag said this was an ongoing issue with summer just around the corner.
"They will have nowhere to go over the summer months when holidaymakers return."
Ms Read, said they were working alongside community agencies and accommodation providers to address this issue, as Hawke's Bay is a popular destination with accommodation traditionally tight over the summer period.