Relief is on the way for people who have to borrow money from the Government for emergency housing.
But it won't kick in until later in the year, and those who've already built up a debt will still have to pay it back.
Labour leader Andrew Little says the Government should write off the debt racked up by people staying in motels while they wait for emergency housing, Radio New Zealand reports.
Mr Little said it was outrageous that people who went to Housing New Zealand or Work and Income looking for help were stuck with exorbitant motel bills, the national broadcaster reported.
"These people are in a situation that is not of their making. It's largely a failure of government and that debt should be written off, put a line under it," he said.
Social Housing Minister Paula Bennett said she was concerned about the debt people were building up and the situation would change from September, RNZ reported, although the debt currently being racked up would still stand.
"We're making a change that no longer for emergency housing purposes, people who borrow would have to pay back," RNZ quoted Ms Bennett as saying.
A cap would not be put on how much people could borrow because she was worried people would go to fringe lenders and get themselves into a worse financial situation.
Community housing groups say an increasing number of people are running up debts of tens of thousands of dollars living in emergency accommodation like motels, RNZ said.
It cited the case of one woman with eight children facing a debt of up to $100,000 for emergency housing.
ONE News reports tonight that Ms Bennett conceded today that homelessness is a growing problem.
"Certainly what I've seen is it has been more acute in the last two years," she said.
Political Editor Corin Dann says a boost to the Government's social housing reform progamme is expected in Thursday's Budget.
The programme sees state houses sold to community housing groups deemed better able to help high-needs tenants.