While adults remanded in custody were taken to the Hawke's Bay Regional Prison, youth remained in police cells until beds at youth residences around the country were made available, Mr Kennedy said.
At the Youth Court hearing on Tuesday he expressed his concern that the range of alternate custody options for the 15-year-old hadn't been explored.
Section 328 of the Oranga Tamariki Act 1989 states that where a child or young person appears before the Youth Court the court shall order that they be detained in the custody of the chief executive, an iwi social service or a cultural social service.
Mr Becroft said his office had consistently advocated for the law to be changed, to remove the option to put young people in police cells when they are on remand.
"That is the only solution to guarantee it does not happen. There are sufficient legal safeguards and flexibility on the books already to ensure a young person is kept safe and secure, and the public is protected, without the need to continue with the option of a formal remand to a police cell."
Less than one hour after Tuesday's hearing Mr Kennedy's office was notified that a bed for the teenager has been found in Palmerston North, where he is awaiting his next court date set for April.
In the days since the youth advocate said public feedback about why the youth was before the court had clouded the issue.
"Obviously people shouldn't be drawing conclusions about why he is in custody. That's not the issue. Undoubtedly he is going to be held accountable for whatever he has done.
"All I'm saying is that the proper placement for him to be is a resident bed or those other places, not a police cell. That's really the issue. It's not a question of locking him up it's where they've lock him up, where they've put him, that's the issue."
Emotional trauma was a key concern in the matter, Mr Kennedy said.
"One of the biggest concerns is that we've got a high rate of suicide amongst young people in New Zealand. I hate to say it but I think we lead the world, or if we're not leading we're in the top three, so mental health is a big issue.
"I don't think we're doing these kids any favours by putting them in an environment which could exacerbate that."
Oranga Tamariki general manager of youth justice residences Ben Hannifin said there were approximately 140 residential beds, 15 community remand beds and six corrections beds at any given time in the country.
More beds had been added since April 2016 and the Ministry worked hard to place all young people held in police cells into more appropriate placements, he said.
"This work has seen a significant reduction in young people spending more than 24 hours in a police cell compared to a year ago ... ultimately the aim is to have no young people needing to stay in cells longer than 24 hours."