UPDATED 8.31AM Auckland Action Against Poverty say that an increase in people borrowing for accommodation is proof of a housing crisis.

Almost $20 million in the last year has been borrowed for accommodation costs, and AAAP argue that is a new phenomenon.

Ministry of Social Development figures show in the June quarter alone, accommodation assistance was 23% higher than the same quarter of last year.

It also showed overall benefit numbers are declining; they're down six percent in Auckland and two percent nationally since June last year.

Advocacy coordinator Alastair Russell said he's never seen figures like it.

He said they're coming across people who owe tens of thousands of dollars because they cannot find accommodation.

"This is confirmation of the Auckland housing crisis, which is affecting those right at the bottom of the heap."

"People are homeless, living in third world conditions, because the government continues to deny the existence of a housing crisis."

Alastair Russell said the AAAP advocacy service wouldn't have to exist if the ministry was doing its job properly, and that the numbers are evident of a toxic culture at WINZ offices that harasses, intimidates and punishes people.

"It's unsurprising that people simply do not want to go into those offices, there is absolutely no evidence from the government, from those statistics gathered, to show that people who move off benefits are in any way better off."

LISTEN ABOVE: Founder of Island Child Charitable Trust, Danielle Bergin, speaks with Larry Williams

A charity that helps find homes for families, says it's no surprise people in need are in debt with Work and Income because there's simply no where to put them, other than a hotel.

Founder of Island Child Charitable Trust, Danielle Bergin, told Larry Williams it's not a cheap option and the government isn't acknowledging it's a problem.

"People are going to work and income at the moment, walking in off the street and saying 'we are homeless, we are desperate'. Now if there's no room in the emergency housing shelter to help homeless families, then they are put into motels."

Bergin said some moteliers are taking in as many people as possible and at very short notice, but not all are as caring:

"There's also some allegations some moteliers are actually charging more per room per day than what they would normally charge for someone who just walked off the street."

In recent weeks, Prime Minister John Key has argued people living in cars and garages should seek help from Work and Income.