The Government will buy up to three more motels and construct modular homes as part of a new $300 million investment in emergency housing.

The huge funding package, announced this afternoon, is designed to lift the number of temporary housing places to 2200 at any one time - up from current levels of 800 places.

Announcing the funding boost at Parliament, Social Housing Minister Paula Bennett said the package was a "gap-filler" until more permanent housing could be built.

Bennett admitted that it was relatively new territory for the Government. Until last year, emergency housing was the domain of local government and charities.


But she would not go as far as conceding the significant investment was an admission of a housing crisis.

"What it's saying is there are most certainly challenges out there and some of our most vulnerable feel them.

"Central Government hasn't been in this space before. We are the first Government to step up and give them some certainty of funding.

"We have seen a demand and are unapologetic about stepping up and delivering for them."

The new funding - the second big investment in the sector in six months - prompted Opposition parties to say that National was now paying for a problem of its own making.

Labour's housing spokesman Phil Twyford said it showed "how bad they'd let things get" and New Zealand First leader Winston Peters said Bennett was "scrambling to douse the flames of political embarrassment".

Salvation Army spokesman Ian Hutson said his organisation wanted more permanent housing, but the state of the housing market meant a greater supply of emergency housing was needed.

"The additional funding announced by Government today will help organisations like The Salvation Army provide emergency housing and related support services to more people," he said.


The extra emergency housing places would be found through a combination of buying, building and leasing properties through the Government's housing agency, Housing New Zealand.

In Auckland, where demand was greatest, at least two or three motels were expected to be purchased as emergency shelters, and more could be leased.

"People have been going into motels for decades who find themselves in emergency situations and need it," Bennett said.

"I don't think it's suitable all of them time, particularly when you're relying on a motel owner to keep an eye on the people and make sure they're getting the services."

Modular homes would be constructed outside of Auckland before being moved on to vacant sites in the city, including land earmarked for schools and roads in future.

One emergency housing development was already underway at Luke St in Otahuhu, on land which is set aside for a school in 10 years' time.

The availability of emergency housing has been in the spotlight since reports earlier this of people living in cars and garages in South Auckland.

The Government responded with $41m in funding in Budget 2016 - the first time the Government had directly funded emergency housing.