There are more public houses, shorter housing waitlists and fewer people in emergency housing – so why are more people sleeping rough?

When the government came into office, it announced a target to reduce the number of households living in emergency housing motels by 75% by 2030. It was a lofty, but important, goal. For any government, getting people out of emergency housing is not just a moral imperative, it’s a financial one too.

Emergency housing is the lowest rung of the public housing system, a last resort for people with nowhere else to go, while they wait to be placed into transitional housing or public housing. Conditions are often crowded and squalid, with no support systems. It’s also really expensive. The government spent $336 million on emergency housing grants in 2023, an average of $273 per night per household, paid directly to motels and commercial accommodation providers.

In January 2025, associate housing minister Tama Potaka announced the government had achieved its goal five years early. Between December 2023 and December 2024, the number of households in emergency housing motels fell from 3,141 to 591. Overall use of emergency housing has declined continuously since its peak in November 2021.

 

Source: Salvation Army State of the Nation report

In isolation, it should have been a massive victory. But the government has found itself dogged by claims that its policies have directly led to increased street homelessness. What really happened?

A Ministry of Social Development report credited the fall in emergency housing numbers to “operational changes” within the ministry and “increased housing support services to help people out of emergency housing”. This includes the government’s Priority One policy, which bumps families with dependent children to the top of the social housing waitlist if they have been in emergency housing for 12 weeks or more.

The impact of this policy can be seen in the data. The number of people on the waitlist living in “temporary accommodation” (emergency housing) has halved between March 2024 and March 2025.

Source: Homelessness insights report June 2025

Since June 2023, 21,224 applicants have been housed from the social housing waitlist. The trend line shows a general monthly increase, with a particular spike in July 2024, when 1,298 people were placed into homes.

Source: Ministry of Housing and Urban Development housing dashboard

New people continue to enter the waitlist every day, but the total size of the list has shrunk roughly a quarter between June 2023 and June 2025, from 24,716 to 19,115. This is mostly explained through an increase in public housing supply, as Kāinga Ora has completed some large-scale new builds. July 2024 set a recent monthly record, with 1,635 new homes coming online.

Source: Ministry of Housing and Urban Development housing dashboard

The vast majority of these new homes were funded by the previous Labour government. A Cabinet paper released in February shows the current government does not intend to increase the overall stock of Kāinga Ora homes. National-led governments typically prefer to incentivise community housing providers (CHPs) to provide non-government state houses, rather than investing in Kāinga Ora houses. CHP housing has grown, with 1,677 new houses since June 2023, but still makes up only 16% of overall social housing.

Source: Salvation Army State of the Nation report

There’s good news elsewhere, too: the number of individuals receiving Housing First services increased from 2,806 to 3,711 between June 2023 and June 2025. Housing First is generally considered the most effective programme for getting severely homeless people into stable tenancies. There are still 985 people on Housing First waitlists, 37.8% of whom have been homeless for three or more years.

So there are more public houses, more people are being offered places in them, and more people are receiving homelessness services. That would usually correlate with lower levels of street homelessness. But that doesn’t appear to be the case.

The government doesn’t have particularly good data on homelessness. The 2023 census found that 112,496 people were “severely housing deprived” – but just 333 people were counted as “roofless/rough sleepers”. Stats NZ admits this is almost certainly an undercount. People living at no fixed abode are inherently hard to track and are often suspicious of authority.

Source: Salvation Army State of the Nation report

The government’s homelessness insights report for June 2025 said there was “insufficient data to draw any conclusions” about whether overall homelessness had increased or decreased since 2023. But the report included data collected by charities working with homeless people across several New Zealand cities, which have tracked considerably higher numbers of rough sleepers, and this on-the-ground data is generally more thorough than high-level census data.

In Auckland, six community providers found homelessness had risen 90%  since September 2024, from 426 people living without shelter to 809. In Wellington, Downtown Community Ministry recorded a 25% increase in people rough sleeping in 2025 compared to 2024, from 114 to 141. Christchurch City Mission recorded 270 new clients in the six months to March 2025, up from 156 in the previous six months.

The homelessness insights report suggested this could be the result of wider social and economic factors, including higher unemployment, rental inflation and higher rates of family violence and methamphetamine use. If that were the case, we’d expect to see other spikes in housing need over the past year. But we haven’t. There hasn’t been any discernible increase in the number of people entering the social housing waitlist – in fact, the number is slightly down since 2023, as the below graph shows.

The number of monthly entries onto the social housing waitlist (yellow) and applications to transfer social houses (blue) (Source: Ministry of Housing and Urban Development housing dashboard)

Possibly the best explanation for the increase in rough sleeping comes from the following graph, which shows a dramatic increase in the decline rate of emergency housing applications since 2024, from 4% to 32%.

Source: Homelessness insights report June 2025

That’s the result of a government policy called “Tightening the gateway into emergency housing”, which came into effect in August 2024. It’s a set of new rules that make it harder for people to get into emergency housing and harder to stay.

Emergency housing is available to anyone who does not have adequate accommodation and who comes under income and savings limits. It’s initially granted for seven days but can be extended indefinitely. There are certain obligations on people in emergency housing: they must contribute 25% of their income towards housing costs, engage with support services, and make active efforts to find somewhere else to stay.

However, under the old rules, the Ministry of Social Development would not decline emergency housing grants if it would “cause serious hardship” or “increase or create any risk to the life or welfare of the applicant or the applicant’s immediate family”. Emergency housing is a last resort for people who generally have nowhere else to go, so declines were extremely rare. Under the new rules, that is no longer the case.

According to the homelessness insights report, since the new policy was put in place, emergency housing applicants have been rejected for reasons including: “The need can be met another way” (34.3%), “Circumstances could have been reasonably foreseen” (22.5% – this includes where a person is determined to have contributed to their own homelessness), “not eligible” (16.7%) and “not an emergency situation” (14.7%).

Modelling provided to ministers by the Ministry of Social Development ahead of the changes estimated that 1,000 fewer households would be able to access emergency housing, which would save the government $350 million over five years. This net saving was reapportioned by the government for Budget 2024.

Source: MSD Supplementary Analysis Report – Tightening the Gateway into Emergency Housing

The Salvation Army’s State of the Nation report said the changes to emergency housing eligibility were “a key contributor to rising street homelessness and housing insecurity”.

It’s difficult to say exactly how many of the people whose emergency housing applications were declined ended up living on the street, because the government doesn’t have a good record of them. While most people who leave emergency housing enter transitional housing or social housing, 14% were unknown to the government, according to the homelessness insights report. And that’s only people who were accepted into emergency housing in the first place – it doesn’t include those who were denied up front. (Access to this data is improving – at its peak under the previous government, up to 50% of emergency housing exits were untracked.)

Source: Homelessness insights report June 2025

In their analysis of the policy, Ministry of Social Development officials warned ministers Louise Upston, Chris Bishop and Tama Potaka that “the proposed changes are likely to increase the risk of homelessness, rough sleeping, people living in cars, overcrowding, and could increase the number of people living in unsafe situations”.

Similar warnings are repeated multiple times through MSD’s report: “without sufficient housing supply, more people may end up homeless as a result of tightening the [emergency housing] gateway. Costs and risks associated with homelessness are likely to accrue over time, especially in the longer term.”

Officials highlighted that the changes were “likely to disproportionately impact population groups over represented in [emergency housing], including low-income single people, sole parents and their children, Māori and Pacific peoples. It will also not account for those with complex needs who may find it hard to meet responsibilities ( e.g. people in a heightened state of stress, and/or those with poor mental health and/or addiction issues).”

The report also warned that the changes could breach the Crown’s obligations to Māori under article 3 of te Tiriti o Waitangi and to children under the United Nations Convention on the Rights of the Child.

When questioned by Jack Tame on Q + A earlier this month, Chris Bishop denied assertions that the policy had kicked more people onto the street, but said he was seeking “urgent advice” on the issue.

The biggest question is whether these changes were necessary at all. The number of people in emergency housing was already on a rapid downward trend and had been for three years. Increased public housing supply, combined with the Priority One policy, successfully gets more people into stable homes and reduces the financial burdens of emergency housing. The government likely would have hit its 75% reduction target ahead of schedule, even without making it harder for people to access emergency housing – and would have done so without such a severe human cost.