Millions of dollars is being spent putting the homeless into motels while Rotorua rents are "skyrocketing" making it almost ''impossible'' for people to find affordable accommodation.
Figures from the Ministry of Social Development (MSD) show from January to March this year it approved 1852 emergency housing grants and paid $2.27 million to 34 motels, hotels, holiday parks and backpackers in the Rotorua District alone. This compared with 1375 grants and $1.6m in the last three months of 2018.
Social agencies say the housing crisis continues to bite and although Housing New Zealand would transport six new one-bedroom homes on to sites on Tuesday more needed to be done - with hundreds waiting for state homes.
MSD regional commissioner Mike Bryant said the number of people it was helping with emergency accommodation continued to grow.
"At any given time, we have many families, often with high needs and complex situations, that are waiting for public housing. We're working closely with our housing providers to help those people find permanent homes as quickly as possible."
According to Ministry of Housing and Urban Development data there were 240 applicants waiting for homes in the Rotorua district and listed on the public housing register from January to March compared with 177 in October to December 2018.
Tremains Real Estate branch manager Malcolm Forsyth said there was a huge demand for rental properties and ''absolutely no supply''.
"We are seeing basic three-bedroom homes in the $500 range and anything a bit different creeping into the $600s. It is just crazy.
"I suppose we are working on behalf of the landlord but it is a scary situation and it's also making it impossible. If you have a basic house being rented out at $600 that is $31,000 you need to come up with on an annual basis, how can you do that plus live and save to buy your first home?"
Market forces were dictating the situation which was compounded by landlords cashing up to take advantage of growing property values and first-home buyers entering the market, he said.
Love Soup co-founder Elmer Peiffer said he seen a two-bedroom house advertised in Glenholme for $495, which was out of reach for many families.
He said increasing rents were creating other crises as people struggled to pay for a roof over their heads.
Peiffer was aware of 100 families in Rotorua in desperate need of a home now.
Salvation Army Rotorua Corps lieutenant Kylie Overbye said the Salvation Army had four transitional homes in Rotorua with another six coming this year.
She said the housing crisis was complex and "there is no quick fix to situations like this".
"Simply put there is not enough affordable housing in Rotorua and the people are feeling it. We are noticing more and more people are having to live quite transient lives and it is really not good for families to be living like this."
A motel manager who did not want to be named said on average 20 to 30 families a day were knocking on the door asking for quotes for the MSD.
He said the motel stopped offering accommodation because of the disruptive behaviour of a few families.
"There are some really good families but there are some really, really bad ones which spoil it for the rest."
However, he said living in motels was not a viable option "and I have heard some places are charging $170 a night for a bed".
A Housing New Zealand spokesman said it had 652 houses in the Rotorua District and 637 or 97.7 per cent were tenanted to June. Meanwhile, eight properties were in the process of being re-tenanted and the rest were undergoing repairs or upgrades, reinstatement or pending demolition.
On Tuesday Housing New Zealand will launch a pilot programme in conjunction with the Ministry of Housing and Urban Development. It would transport six new one-bedroom homes on to sites in Glenholme (2) and Fordlands (4).
"These units will provide people in urgent need with a warm, dry, safe place to stay for around three months or more while they find permanent housing."
In May this newspaper reported Housing New Zealand would build 42 new state units in Rotorua, which are replacing up to 12 existing homes deemed past their use by dates.
By the numbers
• There are 636 public housing tenancies in Rotorua City, managed by four housing providers including Housing New Zealand, Link People, Accessible Properties Ltd and Airedale Property Trust.
• There are 109 transitional housing places in Rotorua City, managed by five transitional housing providers including Linkpeople, National Collection of Independent Women's Refuges, the Salvation Army, Visions of a Helping Hand Charitable Trust and Emerge Aotearoa.
Data as of March 31, Source Ministry for Social Development