Property developers are ditching Special Housing Areas (SHAs) for better deals under Auckland's Unitary Plan.
SHAs force landowners to ensure at least 10 percent of their homes are affordable, which the Unitary Plan does not.
Five developers have decided not to go ahead with their projects. Instead, they're opting to take up new provisions under the city's Unitary Plan.
Minister for Housing Nick Smith told NZME the scheme was only meant to be temporary to kick-start development and isn't surprised developers have pulled out.
Labour's Phil Twyford doesn't buy that.
"Everything's a temporary fix with this Government," he says. "They seem to make up their housing policy every day."
Mr Twyford says SHAs have been a complete flop.
"Really this latest move by some developers pulling out because they don't want to build the required 10 percent of affordable homes is really kind of the last whimper of National's failed housing policy."
He adds Labour would lead a programme to build 100,000 affordable homes over 10 years, which would be sold only to first-home buyers.
Mr Twyford wants the Government to declare a state of emergency to deal with housing issues.
Mr Twyford said research from University of Otago suggests 41,000 New Zealanders are homeless. That includes people living in campgrounds and families living in a single room in a shared house.
The Government must address the social crisis, he says.
"What they should do is declare a state of emergency," he told Q&A on Sunday.
Aspiring politician and former television celebrity Tamati Coffey wrote in the Rotorua Post on Saturday that homelessness is a topic that continues to plague the Government.
"Our homelessness crisis is real and it's happening in most of our big cities, including Rotorua.
"Non-New Zealand residents are buying up our houses and house sales going up with home ownership going down."
A generation of young New Zealanders are struggling to get onto the property ladder and have by default, become part of "generation rent", he says.
Mr Twyford says many solutions are being mooted.
"Someone's proposed the old Mt Eden Prison be used. Someone else suggested a cruise ship. Paul Bennett's talking about pod housing. Look, my message to the Government is I don't care how you do it; just do it."
Newshub. / NZN