Wellington City Missioner Murray Edridge says panic buying at supermarkets means people on low incomes can only find premium brands which are more expensive and therefore unaffordable.
Up to 15 people are living in single dwellings in some cases around the country, sparking a warning that those who are inappropriately housed, as well as those who are rough sleepers, will need urgent help to mitigate Covid-19.
Homeless advocacy group Gimme Shelter has estimated 40,000 people or more are defined as homeless in New Zealand.
About 5000 are sleeping rough and the rest are living in inadequate housing.
Spokesperson James Crow said families in inappropriate housing were often the working poor and therefore hard to reach.
But he said they needed to be contacted to help stop the spread of coronavirus.
"Families may feel that 'at least we're all together', but they may have been inappropriately housed for many years - they may have 10 to 15 people in one house.
"Although not homeless, they are classified as inappropriately housed and they may need to be looked at again."
Crow said he expected some of these families to come back through the social services system due to the economic fallout of Covid-19, which was a chance to assess their living situation.
Wellington City Missioner Murray Edridge said the organisation was preparing itself for a rush of new people needing its services.
"People who are just getting by at the moment may find themselves with reduced hours or unemployed. We're going to see people who just can't afford the things they need to get through," he said.
Edridge said panic-buying at supermarkets meant people on low incomes could only find premium brands, which were more expensive and therefore unaffordable.
"People are having to go without, he said.
The Mission is looking at medium-term accommodation for those who do not have somewhere to self-isolate, such as people living on couches or out of their cars.
Edridge said he was reaching out to owners of apartment buildings or boarding houses with spare capacity.
The most vulnerable were the Mission's priority, he said.
"They're people who don't have adequate housing, often have compromised health conditions, and some of them of course are elderly."
Meanwhile, Downtown Community Ministry was making cell phones available to the street community to help them stay connected.
Last week, Wellington City Council activated its emergency welfare team.
Council community services manager Jenny Rains said they were assisting Regional Public Health in contacting hotels across the city to see who could help, should families or individuals need to self-isolate but couldn't do so at home.
The response had been positive and the majority of hotels were keen to help, Rains said.
She said these people could be tourists, or those in cramped living situations, or who were flatting.