The Government is talking up its plan to use Crown land earmarked for a school to set up a temporary housing development.

The 1.6 hectare site is in Auckland's Otahuhu suburb, and will hold 51 temporary homes to be used by those in need of emergency housing.

Social Housing Minister Paula Bennett said the idea is to provide wrap-around services for families on site, while permanent housing is found for them.

She said as many as 250 people will be able to housed there at any one time.

"I envisage them living there for anything between 12 and 24 weeks. The idea is that they move in there, settle everything down, pay off a little bit of debt and then help them to move into something more permanent.

"We expect to start building very soon, and we'll have people living in them by February. Because the houses are not going to be there permanently, they're still of a really high standard, we'll be able to relocate them."

The latest data from Statistics New Zealand shows more than 9500 new homes were consented over the year to August, up more than 1200 on the year before.

Child Poverty Action Group's health spokesperson Professor Innes Asher said the Government's announcement is a tangible step they've been waiting for.

But she said we need around 40 times the number of temporary houses announced to address the homeless and unhealthy homes crisis.

"More and more children are being damaged from a very young age by living in very cold, damp mouldy houses that would make any one of us sick, and they can have permanent affects on their lives, so dealing with the housing crisis is really vital."

Professor Asher said as many as 2000 households are on Housing New Zealand's priority list, but this is at least a step in the right direction.

"Having people in what's called transition housing, i.e. homes created quickly, and then having a longer term plan, as long as the homes put in are great and they're moveable, I think that's a good step. We need a range of models to help deal with this crisis."