The Productivity Commission has strengthened its calls for more to be done to help community groups providing social housing.
The commission says the boost is needed to cater for increased demands as the Government shakes up its portfolio of state houses.
Community Housing Organisations at present take up $35 million of the $3 billion the Government allocates annually to housing.
The Productivity Commission says the groups will play a bigger role as the Government prioritises state housing to those most in need.
One such group, Auckland-based Habitat for Humanity, says as much as $400 million may be needed to cater for the increased demand.
Productivity Commission head Murray Sherwin says the demands placed on these community organisations, which also provide social services to tenants, will increase as the Government prioritises state houses to those most in need.
In its final report to the Government, the commission has reiterated its calls for councils to do more to release greenfield sites, as well as build more intensively on already developed land to help make housing more affordable.
Finance Minister Bill English says changes to state housing have been gradual to minimise the fallout for tenants.
The Government will consider the commission's full report on housing affordability and formally respond in the next few months, he says.