The Government has spent more than $1 billion on emergency housing grants since it came into office five years ago.
A large proportion of that money has been spent on housing people in need of accommodation in motels across the country.
Social Development Minister Carmel Sepuloni confirmed through answers to written parliamentary questions that since December 2017, the Government's spent $1.2b through the grants.
Senior National MP Chris Bishop said this is a grim milestone for the Government.
"It's a staggering sum of money and I think New Zealanders will be shocked at the scale of the spending on emergency housing."
Currently, there are roughly 4000 households living in emergency housing across New Zealand – many in motels.
Bishop said this is no way for families to be housed.
"What the Government is doing is paying millions and millions of dollars to motel owners, which is great for them; it's a get-rich-quick scheme.
"But it's absolutely terrible for people who are forced to live in these conditions."
He said the fact the $1b mark has almost certainly been passed is a sign of Labour's failure on housing.
Sepuloni said using motels for emergency housing was not something the Government wants in the long term.
"We don't want any New Zealander to be in emergency accommodation – but if there is no other option then we need that there as an option for them."
She took aim at the previous Government which "left [us] with a housing crisis".
"We need to house our most vulnerable people. We are making progress."
In fact, she said the number of people receiving emergency housing grants began to stabilise at the beginning of this year, and is now beginning to steadily fall.
"It's important however that we ensure people have the option of a roof over their heads, and are not forced to sleep in cars or tents," Sepuloni said.
Emergency housing is accommodation for people who urgently need a place to stay and have nowhere else to go.
The emergency accommodation is meant to be temporary while the Government finds more permanent means of housing.
In many cases, the Government pays motel owners for rooms for emergency housing grant recipients to stay.
Sepuloni said this is a last resort.
But in some parts of the country, residents have complained of social unrest at these motels.
Restore Rotorua – a group campaigning against the Government using motels as social housing – say the issue is at breaking point.
"What we've got here is a huge cumulative effect … Fenton St, which used to be known as Rotorua's 'Golden Mile', and now it's Rotorua's 'MSD Mile'", group chair Trevor Newbrook told Newshub.
Meanwhile, the state house waiting list has reached another record high.
The latest data shows 27,200 people are now waiting for a state house – Bishop said these figures have increased fivefold since Labour took office.
Sepuloni said the Government is working towards building more state houses, and residential homes.
"What we have been doing is focusing on building the public housing we need and also making sure we have the right environment and regulation in place to build more houses."