The Government should have been more open about its plan to sell off potentially thousands of state houses before last year's general election, Labour leader Andrew Little says.
The Government intends to sell 1000-2000 state houses in the next year or so, and is not ruling out further sales after that.
Prime Minister John Key today outlined the Government's plan for social housing during his State of the Nation speech in Auckland and said up to 8000 Housing New Zealand homes could be sold by 2017.
Mr Little said it was disappointing Mr Key did not reveal the policy before being re-elected last September.
"Suddenly now after the election, when they think they've got three clear years ahead of them, then they raise it; this is a significant issue it should have been part of the election programme, they knew about this before the election."
Mr Little also criticised the policy itself, saying selling off state houses and subsidising landlords would drive up rents for all renters.
"John Key's announcement of 3000 additional income-related subsidises and the sale of up to 8000 state homes signals the Government is getting out of state housing and setting up a windfall for property developers."
Mr Little said Mr Key was sending thousands of state tenants into the rental market with a taxpayer subsidy which would push rents up even further.
"This is a lose-lose.
"State housing tenants lose the security of dedicated social housing. They will now be competing with the million other Kiwis battling it out in the already overheated private rental market."
New Zealand First leader Winston Peters said moving people from one landlord to another would not solve the housing crisis.
"Mr Key plans to bulldoze Housing New Zealand suburbs to free up land for a mix of social and high income housing, playing into developers' hands."
Mr Key was in denial about the lack of supply, as demonstrated by the plan to review 5000 tenancies, Mr Peters said.
"He wants to move tenants out to free up places...where does he expect them to go?"
Green Party co-leader Metiria Turei also believed the policy would do little more than line the pockets of property developers.
"What John Key did say today is he'd like to sell off entire suburbs of state homes to property developers, with no absolute guarantee that those individual developers will have to provide any space for community housing in the future."
Mrs Turei said the Government had no coherent plan for building any new homes.
"John Key is skirting around the simple truth - selling thousands of state homes will never lead to more people being housed unless more homes are being built to replace them - and I don't see a concrete plan to make that happen."
David Zussman, head of Auckland emergency housing provider Monte Cecilia Housing Trust, said Auckland alone could swallow up the all funding announced by the Government for the whole country.
The sector was pleased to have more initiatives so it could do more work but was concerned there would still not be enough houses to do it with.
He also questioned lack of detail around whether there would be a net increase in the social housing supply.
"One of the things for the community housing network in Auckland is that we want to see a net-increase in the supply of social housing, and I think that would be one of the challenges."