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The organisation moved to clarify its position after the SPCA issued a statement this afternoon saying the proposal could be "catastrophic'' for the animals and community.
The Otago Daily Times reported this week that according to documents it obtained through the Official Information Act, HNZ wants dogs to live at state houses only ''in exceptional circumstances''.
The organisation considered dogs a "barrier to independence'' that made it difficult for tenants to "move on'', the documents said.
The SPCA said today the policy seemed like an overreaction to what was a minor problem, with only 37 reported incidents among an estimated 40,000 dogs.
However, HNZ spokeswoman Jackie Pivac said the organisation didn't have a new dog policy.
"While we discourage tenants from having dogs, we do make exceptions and aim to be as reasonable as possible. We've talked to the SPCA and reassured them about this.''
HNZ said that, like many other landlords, generally it didn't allow dogs in its properties.
"We are, and have always been, upfront with our tenants about this and it's in the tenancy agreements that they sign when they first move into a property,'' Ms Pivac said.
There were several practical reasons HNZ discourages tenants from having dogs, she said.
They can cause damage, be a nuisance to neighbours and make it difficult or unsafe for tenancy managers or contractors to visit HNZ properties.
The documents released to the ODT said about half of HNZ tenants owned a dog and about 38 per cent were there without permission.
Ms Pivac said HNZ reviewed its dog policy in 2012 because it was concerned about the seemingly high number of tenants who had dogs without permission.
"At that stage we did consider taking a harder line on dogs, but in the end we have ended up taking a pragmatic approach to what is always a difficult topic for us.
"Yesterday a range of media ran stories on our dog policy - it has been pleasing to see that many reader comments support our approach.''