Housing New Zealand will get rid of 71 houses in Northland over the next three years despite more than 170 families beingon a waiting list for state or other social housing.
HNZ currently has 28 properties on the market or under negotiation across Northland, of which eight are being sold through the First Home Ownership Scheme.
It has 2239 properties throughout the region - 1313 in Whangarei, 721 in the Far North and 119 in Kaipara. A further 86 properties are provided for Community Group Housing.
The move to free 71 houses drew sharp criticism from Labour MP for Tai Tokerau, Kelvin Davis, who said the decision was a slap in the face for 186 local families who were desperate for a home.
Selling off State houses in Northland didn't make sense, he said, and worsened poor family health, stress, financial problems and domestic violence issues.
Mr Davis said while the Government argued 71 houses were surplus to requirements, his office was inundated with families who wanted a State house but have been told there are none available.
"Now these valuable taxpayer-owned assets are to be sold to landlords and property developers," he said.
"This sell-off is simply mean-spirited and typical of a government who puts money ahead of people who need help."
Compounding the problem, he said, was that rising rents in the private sector cut options for beneficiaries and low income earners.
Housing NZ acting Northland regional manager Stephen Tipa said the 71 houses did not indicate properties for sale but rather projected movements in stock numbers over the next three years based on predicted demand.
"The figures include properties that have been approved or proposed for sale, redevelopment or demolition for reasons such as opportunities for first home ownership, unsuited to local demand, no longer meeting building code compliance or fire damaged."
Mr Tipa said the waitlist for social housing was the responsibility of the Ministry of Social Development (MSD).
According to the MSD, 171 applicants in Northland were waiting for a state home or other social housing last month - 100 in Whangarei, 58 in the Far North and 13 in Kaipara.
"It is important to remember that wait list figures are a snapshot in time and include people who have been offered a home and are in the process of accepting it and those who are in one of our homes but have requested a transfer," Mr Tipa said.
"Housing New Zealand's role is to house those most in need, matching applicants from the MSD waitlist to appropriate homes. Alongside development, divestment [sales] has always been a key component of our portfolio management, as we seek to match demand in terms of size, location and quality."
Last year in Northland, Housing NZ sold 29 homes, including seven through its First Home Ownership Scheme.