The founder of Rotorua's LoveSoup, an advocacy group that helps the city's homeless, Elmer Peiffer said the announcement was a "positive thing" and fell in line with what his group worked to do.
LoveSoup had housed more than 300 families in the last four years and worked with them to become capable and good tenants, as well as addressing internal issues, he said.
Without ongoing support, a lot of these people would be torn from families or even still stuck on the streets battling their demons alone, he said.
Peiffer said this funding could help support systems in the community continue to make a "world of difference" for these people.
About $31 million of the funding will be spent over four years on intensive case managers at the Ministry of Social Development (MSD) to help families living in emergency motel accommodation.
A further $16 million will go towards social services to help the same groups and it is estimated the work will help about 1500 people get emergency special needs grants.
Rotorua was highlighted in the announcement to benefit from the expansion of the Sustaining Tenancies programme that would use $6.6 million of the funding over two years.
The scheme, run through community groups, gave practical budget advice, property maintenance and mental health support to people in state housing.
Visions of a Helping Hand manager Tiny Deane said it was important and valuable that the Government was addressing the mental health and addiction struggles of these people in need.
He said they often developed while living on the streets and the community could not get a handle on homelessness until this was acknowledged and dealt with.
Deane said the wraparound services provided by his trust had saved more than 10 lives in the last 18 months and had pulled people out of addiction and mental health battles.
That was what it was all about and the funding will only raise this number, he said.
Minister of Social Development Carmel Sepuloni said at the announcement yesterday that the plan was a short-term fix while the Government looked to build more public housing.
"MSD has identified a distinct group of people that face a range of complex issues that are a barrier to finding and keeping a home of their own, such as mental health and addictions, criminal history, or family violence," she said.
The Salvation Army's national director of community ministries, Jono Bell, said the complexity of issues that people were facing in emergency housing was "massive".
He believed that these issues combined with a lack of life skills played a huge role in the cause of homelessness, he said
Bell said putting a roof over someone's head was not everything and addressing internal issues and providing wraparound services was the way forward.
