UPDATED: 12.23pm Emergency housing has been given what appears to be a huge boost to cope with Auckland’s ballooning housing crisis.

Social Housing Minister Paula Bennett said the May 26 Budget will fund 3000 emergency housing places every year, believed to represent about 750 beds given an average stay of about three months.

Minister of Housing Paula Bennett spoke outside the Wellington Shelter announcing the funding of emergency housing across the country.

"We've had growing concerns around people needing emergency housing."

$32 million would be used to provide beds across the country.

About 360 beds would be provided for Auckland, 100 in Christchurch and 60 in Wellington. 

This compares with only 99 places registered on the Social Development Ministry’s existing emergency housing database in Auckland, which is likely to include about half the national total.

But Labour MP Phil Twyford said the announcement is due to the Government's failure to address the housing crisis and its determination to sell off state houses.

"Their running down of state housing and their stubborn determination to sell off what houses we have instead of building new ones."

Ms Bennet said those accessing the assistance will be expected to pay 25 per cent of their income towards the accommodation they receive, with the money going to the organisation that houses them.

"Actually they've got to start getting themselves into a position where they are contributing for themselves and their overhead costs so that we can leave them to permanency, of which that 25 per cent is bound to be more, if they're going into some form of private rental."

Labour MP Phil Twyford said he doesn't see anything wrong with the partly user pays system.

He said if someone is being provided with emergency housing they will almost certainly be in receipt of a benefit.

"And I think it's probably a pretty reasonable expectation that at least a small share of that benefit should be a contribution to the cost of the services they're getting."

Ms Bennett said currently NGOs providing night shelters and emergency accommodation don't get funding from the Government, instead they have to fundraise.

"What agencies and organisations were telling us was, if you pay for the beds then we're not fundraising for them. We can actually get on with the job of doing more wrap-around services and better connecting people with the kind of help they might need."

She said the Government would also fund a new emergency housing Special Needs Grant to support individuals and families with the cost of emergency housing for up to seven days if they are unable to access a contracted place.

The two measures will cost $41.1 million over the next four years, or an average of about $10.3 million a year.

They follow the first ever review of emergency housing over the past year in a field which has been traditionally left to charity.

The Government is expected to call for tenders for agencies to provide the new beds, with contracts expected to be in place by September.