Renters in Dunedin are battling to secure homes with dozens of applicants vying for the same house.

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Anything other than a squeaky clean past is seeing potential tenants passed over and some are willing to pay more than market rent just to secure a place to live.

For one Dunedin mother the idea of buying a house is a fantasy - she just wants a rental to call home.

"I've probably been looking for a rental for around eight months," the young mother, who was so embarrassed about her situation that she did not want to be identified, said.

"So now I'm currently just staying in a motel. I check Trade Me every day for new listings and on Facebook and have been to so many viewings and just can't get anything. I'd say I've been to 30 or 40 viewings - it's been a lot."

She is living in a one-bedroom motel unit with her three-year-old son at present.

That was despite a good reference from a past rental and never having missed rent or had any disputes with landlords.

She believes her living situation counted against her.

"Someone that I know talked to a landlord and he said they personally wouldn't rent to a single parent because apparently all single parents do is party and have domestics all the time," she said.

That stigma had hung over her while searching for rentals, she said.

Another Dunedin mother, Bridget Hamilton, said bad credit was counting against her.

But she had never missed a rent payment and had prioritised it over other bills, leading to her predicament.

She also had a good reference from a long-term landlord and, whatever her credit issues, she still needed a home for herself and her 9-year-old son.

"I'm staying with a gentleman ...he's in a very small one-bedroom house - it's got a large garage. My son is staying in his walk-in wardrobe and I'm in the garage," she said.

It had never been so tough finding a home in the city, she said.

"Just recently one of my girlfriend's found a house and my daughter found a place - we're all fighting for the same houses. There's so many expectations of us as mothers and it's so hard."

The Salvation Army's Dunedin manager of community ministries, David McKenzie, agrees.

"We know how hard it is to find permanent housing for them. They can be turning up to rental inspections along with 40 other people," he said.

The demand meant landlords were able to charge more and, as a result, he was seeing more people needing food handouts and other assistance, Mr McKenzie said.

The Real Estate Institute of New Zealand's regional spokesperson, Liz Nidd, said there was a shortage of about 600 units around the city.

"Because of the shortage they're finding there's competition everywhere they go. If they have anything other than a totally, squeaky clean tenancy record then just forget it because the owners and the property managers who are working for the owners have choice."

Mrs Nidd sat on a mayoral taskforce looking at housing issues in Dunedin alongside Mr McKenzie.

She said she had never seen as few rentals on her agency's books as there was at present. And without urgent action, it would only get worse.

On Monday, the Dunedin City Council adopted the recommendations of the taskforce and committed more than $100,000 towards a 20-year plan to tackle housing issues in the city.