A community activist says Work and Income is increasingly using expensive motels to meet the need for emergency housing, and the system is crazy.

Auckland Action Against Poverty's Sue Bradford told Mike Hosking using overpriced motels to house people with nowhere to go is a poor solution to the need for more state houses.

She said there are up to 60 motel providers on the WINZ books in Auckland.

She has no idea how those places are chosen, why the rates are so extortionately high, and thinks it's criminal that the taxpayer is pouring money into rip-off motels and lodging houses.

Sue Bradford said it makes no sense to put people who are already in severe financial strife in a situation where they owe the Government thousands in debt for temporary accommodation.

Her group is advocating for a massive increase in the building of state houses to meet demand.