There were 194 Hawke's Bay families on the Ministry of Social Development's waiting list for state housing.
"It is absurd for National to be hocking off state homes when there is a massive housing shortage," she said.
"Housing New Zealand's stock has already fallen by 1600 houses in the past three years.
"This valuable asset is owned by all New Zealanders to look after our most needy.
"Changes to the criteria in recent years mean it is now very difficult to even get in the queue for a state house.
"So these people are the most vulnerable in our regions," she said.
National's Mr Foss dismissed Ms Whaitiri's comments.
"[Ms Whaitiri] is talking nonsense.
"We have $18.7 billion invested in around 68,000 houses as well as paying $718 million in income-related rents and $1.1 billion in accommodation supplements to those in need.
"We are empowering community housing providers.
"Hard-working taxpayers, many who are paying their own mortgage, know that National is managing their investment in housing prudently."
Under a Labour Government mortgage rates were more than 10 per cent and more than 1000 state houses were sold off, Mr Foss said.
Housing NZ area manager Andrew Cairns said: "The majority of the projected 271 figure for Hawke's Bay relates to earthquake prone units that have already been or are proposed for demolition because they pose a safety risk and some properties where leases will expire.
"We are consistently housing people from the waiting list in Hawke's Bay and are confident that we have enough stock to meet demand."
Labour's spokeswoman for Tukituki, Anna Lorck, said: "I haven't found one [house] that's earthquake prone that's been on the market."
"My concern is it will be a lot more than [271 houses] unless we do something about it."
Labour last year continually accused Housing NZ of selling off its assets en masse, a charge the state agency has denied.
The corporation sparked an outcry from Hawke's Bay Today readers last week when it said it was considering selling a Hastings state house that had stood empty for three months, after it was turned down by four housing applicants because it was in a location where they "do not want to live".