A montage of emergency housing providers in Tauranga. Image / George Novak
A Tauranga motelier paid more than $1 million for providing emergency housing has stopped taking on clients, saying she would rather have her motel empty.
Hers is one of seven local motels paid more than $1m over two years by the Ministry of Social Development (MSD).
National Party Tauranga MP Simon Bridges says in his view the money spent is a "sign of failure" and people wanted more housing and support for infrastructure.
Meanwhile, an iwi chief executive says motels were "just a roof" and the challenge now was providing wraparound support.
Figures released by the MSD under the Official Information Act show $62.9 million was spent on emergency housing in the Bay of Plenty between July 2019 and June this year.
This included suppliers from outside of the region which is likely payments in arrears for a previous accommodation or future period as a number of clients moved, but their address had not yet been updated.
Of these, 22 motels earned more than $1 million: 15 in Rotorua, and seven in Tauranga.
It highlights the severity of the housing crisis, with the number of people on the housing register up 102 per cent in Tauranga and the Western Bay in two years, sitting at 855 in June this year.
City Suites in the CBD was paid the most with $1.99m by MSD from 2175 emergency housing special needs grants for 267 distinct clients in two years.
The owner declined to comment.
The second-highest-paid was Roseland Motel on Brown St in the CBD, paid $1.63m from 609 grants for 96 clients.
The same owner also owns Cobblestone Court Motel, which was paid $1,362,501 during the same time.
Ambassador Motor Inn owner Kerry-Anne Howlett said she "would rather keep my units empty than have emergency housing in them".
The motel was paid $1,457,037 in the two years.
She said fights, police visits, domestics, and thefts all contributed to her not taking on clients any more.
She said she stopped providing emergency housing accommodation 18 months ago after renovating.
In 2019, 12 units were shut for 11 months because of leaking issues and she could not get travellers in. Emergency housing became her income.
She now only takes on district health board clients from the hospital with nowhere to stay. Work and Income paid for these, she said.
Howlett would not say what the units' rates were, and said each case was different.
A Rainbow Motel spokesman, who did not provide his name, said it decided to take on emergency housing clients because of Covid-19 and lack of tourism.
It was paid $1,563,760 by MSD.
He said visitor numbers dropped and homelessness increased and they wanted to help.
"At the same time, we can get through the winter of Covid-19."
He said it paid GST, insurance, and more for water, power, maintenance, and repairing damages.
"We pay much more money than before, the net profit did not increase."
Omokoroa Kiwi Holiday Park owner Sharon Addison said the motel became a provider during lockdown last year.
It was paid $761,013 from 504 grants for 84 clients and Addison said people were charged market rates - between $100 and $180 per night.
She said she did it because of the lack of international tourists and the situation became direr with Auckland and Waikato in lockdown.
"We have to survive ... we're just a bit scared really."
Addison said she would keep being a provider until Auckland and international borders opened up.
She said there were "very good people" staying at the holiday park.
"Most of them work. They're not down-and-outers, they really just can't get houses, the cost of them," she said.
"It's been an eye-opener, how people are struggling."
Fountain Court Motel and Dipak Prasad Upreti were paid $1,283,512 and $1,025,176 respectively. They could not be reached for comment.
Mount Maunganui's Aqua Beachfront Motel and Greerton Motor Lodge were paid $985,361 and $846,360. Both declined to comment.
Ngāi Te Rangi chief executive Paora Stanley said the money was one thing, but it was more about the quality of care of people needing the support.
"They're just a roof, they're not a healing place. They don't have social workers, counsellors, educators and health workers. It doesn't actually bring about change."
He said people wanted to heal but needed to have the services available, which is what the current emergency housing model was lacking.
He said this was important, but it would be a challenge and cost a lot of money.
The Government had little choice but to get everyone off the streets because of the public health crisis last year, he said.
Now, the people needed to be given the resources and support to carve a positive future for themselves, he said.
The iwi bought eight apartments that are used as transitional housing for homeless families, former rough sleepers, pensioners, and those holed up in motels.
The Oranga Whānau facility opened in July and has 23 residents, who can also access holistic wraparound services.
It received $2m through the He Kūkū Ki Te Kāinga Fund to help with this.
The iwi had social workers as well as employment brokers and counsellors. It had fostered relationships with numerous government agencies to run an array of programmes.
Bridges said the money spent was in his view "hugely disappointing" and "unbelievable".
He said the people wanted more housing and support for infrastructure, "not 60-odd million going to moteliers in our region. That's a sign of failure".
He said that money could have built a large number of houses in the region.
"The reality is, all the money comes from the taxpayer," he said.
He said the Government should get on with transforming all state housing stock to high-density dwellings.
He acknowledged that the National Party had a part to play in the situation because had been decades in the making, but said the current Government had been "MIA" in increasing housing supply and supporting infrastructure.
In the OIA response, MSD said special-needs grants paid for commercial accommodation for those in urgent need of somewhere to stay.
It was initially intended to be for seven days but subsequent grants were now applied for in succession and paid for up to 21 days at a time, because of the demand.
MSD did not contract accommodation suppliers to provide emergency housing and suppliers could stop providing when they wanted.
MSD acting regional commissioner Brent MacDonald said while the Ministry of Housing and Urban Development (HUD) and Kāinga Ora worked to increase housing stock, it was focused on giving people in urgent need somewhere to stay.
The cost of commercial accommodation varied by location and clients were expected to get the same quality of service as a guest.
He said it talked to clients regularly about their accommodation options and raised concerns directly with suppliers, and clients were free to reject a suggested option.
He acknowledged many people had complex needs and they all had a case manager who made sure they got all the support available.
Those needing more support could be referred to a navigator - contracted wraparound providers – who worked at specific motels and could help to co-ordinate community, health and government services.
MSD partnered with Ngāi te Rangi and other community agencies to provide navigation support to clients in emergency housing, MacDonald said.
The HUD Public Housing Plan 2021-2024 stated there was a shortage of available land in Tauranga coupled with strong population growth which increased the demand and prices of housing.
The city is a focus area in the plan which stated house prices increased by 75 per cent in over five years - some of the most unaffordable housing in the country.
The plan stated HUD would increase housing by 532 by 2024.
It stated recent district plan changes would help with intensification and provide opportunities to build more public housing, supported by an Urban Growth Partnership.
HUD external engagement and communications manager Dennis de Reus said the housing crisis "won't be fixed overnight and won't be solved by the Government alone".
The ministry's Government Policy Statement outlined Tauranga and the Western Bay as an urban partnership area where central and local government and mana whenua collaborate with a focus on integrating land-use and infrastructure planning.
The ministry supports "at least" 13 iwi and Māori entities across the region through three funds.
In Tauranga, Kāinga Ora has 53 new state homes currently in evaluation or being progressed, including 21 for Haukore St and eight for Waihī Rd.
Kāinga Ora is looking into options around increasing housing supply including partnering with landowners and purchase of land.
The Government also worked with councils and mana whenua through the SmartGrowth Urban Growth Partnership, increasingly focused on addressing the sub-regions housing crisis.
SmartGrowth recently adopted a Joint Housing Action Plan, focused on accelerating priority development areas, improving housing for Māori and increasing the public housing stock.
Next steps for HUD
• Supporting a iwi and Māori to develop housing to respond to the high proportion of Māori experiencing housing need.
• Continue to partner with iwi and Māori.
• Identify where land can be unlocked with advice from the SmartGrowth Partnership.
• Shovel-ready funding to improve transport choices and enable intensification in central Tauranga.