Whanganui's Labour Party branch wants Housing New Zealand to go back to providing housing services for people in need, its chairman and deputy chairman say.
Craig Paynter and Bob Dempsey were reacting to Wanganui Chronicle stories about unmet housing need.
They said on the one hand there appeared to be houses to spare, with Housing NZ offering them to flood victims and Social Development Minister Paula Bennett making them available to Auckland people. But recent reports showed a different reality - 25 up for sale and six available while 19 families were at risk or in immediate need.
They noted Housing NZ didn't make empty houses available to the Wanganui Housing Trust when asked, and didn't have a Whanganui office where people could walk in and talk to staff without an appointment.
"The present situation is unacceptable, and it is time for change," Mr Paynter said.
He'd like to see solidly built state houses renovated, insulated and occupied, rather than being sold "to provide a dividend to the Government".
Whanganui state houses had been sold for prices like $64,000 at a time when the median house price was $150,000, Mr Dempsey said. At the same time, rents have increased. "They were static for a long time. In the last two years they have gone up from an average of $180 to $240. That's a big increase."
Labour Party members were approached for help, and knew of people living in substandard situations. "They have a roof over their heads, but barely. By your and my standards, those people are virtually homeless. They're not in adequate, secure accommodation."
Whanganui's ageing population was bound to make things worse. "If it continues like this there's going to be a real crisis of people looking for reasonable rental properties when they're retired."
Labour's housing spokesperson Phil Twyford said in February that Housing NZ appeared to be in disarray. There were deficiencies in its property maintenance and it wasn't building the required number of new houses.
Children were living in cold, damp and mouldy state houses. There was a high turnover in the Housing NZ board and in top management positions. That had to ring alarm bells, he said.
Housing NZ is expected to pay a dividend to Government. In the 2014-15 year, a spokesman said the dividend was $118 million.
The Government was aiming to run Housing NZ down and privatise its work, Mr Dempsey said. "We're not criticising staff in Housing NZ in Whanganui, but we do feel that the Government policy and drive to privatise has meant that the vulnerable in society are finding it difficult to get the help and support they need."