He said the impersonal system would create problems for many people seeking help, including those who spoke English as a second language or those facing an unexpected crisis.
"Working to get outcomes for those vulnerable families is going to be more difficult."
Mr Zussman said he had arranged to meet two managers from Housing New Zealand on Tuesday to stress the serious consequences of the decision.
"Absolutely no arrangements have been made to meet the needs of those people who are no longer being assisted by Housing New Zealand."
Mr Zussman agreed with Labour housing spokesperson Annette King, who said Housing New Zealand was rationalising moves like this to become nothing more than a landlord.
Housing Minister Phil Heatley was quoted by local media as saying the changes were a part of a shift away from a "state house for life" housing policy, towards a new system designed to ensure those struggling the greatest were given priority.