The Salvation Army says some of its clients are spending so much on rent they are unable to pay for other basic items.
It says demand for rental properties in South Auckland and Christchurch has soared and so has rent.
Major Pam Waugh said the situation in those places is "horrendous" for clients trying to find a dry, safe, warm and affordable home.
She said one woman with two children was receiving $430 per week but having to pay $370 in rent, leaving $70 for everything else.
Ms Waugh said about a quarter of the Salvation Army's rental clients are constantly on the move from house to house: couch-surfing or living in garages.
She said benefit levels must be revised to help with housing costs.