Pressure is mounting on the government to allow Housing New Zealand to retain its dividend so it can use the money to build more state homes.

Photo: RNZ / Demelza Leslie

More and more people are being forced to live in cars, shipping containers and garages, according to social housing groups.

The Green Party today announced a plan to address the emergency housing problem, including allowing Housing New Zealand to retain its dividend and refunding its tax.

Party co-leader Metiria Turei said a housing emergency was happening right now, and her party's plan was an urgent, direct response to it.

It was proposing an immediate injection of money into emergency housing, and also removing the obligation on beneficiaries to have to repay when they were put into a motel as an emergency response.

It would free up over $200 million to be spent on building about 450 new state houses, Mr Turei said.

"Ten years ago we might have thought that some policies would make a difference and we would see a significant reduction in the [Housing New Zealand] waiting list. Those policies did not work."

"So we need to be looking at every possible measure and every possible pool of funding to build new houses, because people are desperate for a place to live," she said.

Housing New Zealand is expecting to pay the Crown a dividend of $118m this financial year, the largest in five years.

Last financial year it returned a $108m dividend.

Labour Party housing spokesperson Phil Twyford said the government needed to stop using the agency as a cash cow.

"Since it was elected in 2008, every single year it has basically used Housing New Zealand - an agency that's there to put a roof over the heads of the most vulnerable kiwis - has used it as a piggy bank and raided it and put close to $750 million straight back to the government coffers," he said.

The money could be used to build desperately needed state houses, Mr Twyford said.

Latest figures from Work and Income showed 428 people were recorded as saying they were homeless in the month of March.

But Prime Minister John Key has said the actual number of people without a home could be much higher or lower.

The Salvation Army has warned that the government could not continue to ignore the growing numbers of Aucklanders living without a home.

Its spokesperson Campbell Roberts said Housing New Zealand was not building anywhere near the 1000 new houses a year that Auckland desperately needed.

He was critical of the government's demand for a dividend saying it would make more sense to re-invest the money into new homes.

New Zealand First housing spokesperson Denis O'Rourke said homelessness was the country's number one problem.

"It's driven by a combination of poor policy planning over decades by successive governments and exacerbated by uncontrolled immigration.

So there's not much point taking a dividend out if we wish to actually add capital to Housing New Zealand so it can do its job better," he said.

But the government said the Green proposal was a rushed policy and the dividend was not the issue.

Finance Minister Bill English said the policy did not account for the ongoing cost of subsidising rent, which for 450 properties in Auckland would be about $28m over four years.

He said the dividend was not the issue.

"[The dividend] is the normal way successive governments have used to place a discipline on Housing New Zealand to use its $19 billion of assets well in delivering suitable housing where it is most needed," he said.

Housing New Zealand was already building more homes than the Greens' rushed policy proposed, and additional social houses were also being sourced from Community Housing Providers, he said.

Last week the government announced it would fund 3000 emergency housing places, which were currently paid for by charities and other agencies.