The 12-month contracts are estimated to cost around $4.8 million, excluding cleaning service and security costs. The ministry would not release the names of the contracted motels, citing privacy.
This followed the Government's announcement in May the city's controversial system would receive a $30m shake-up.
The Government had been working with Rotorua Lakes Council and Te Arawa iwi to improve the system.
Hospitality NZ Bay of Plenty branch president and Hennessy bar owner Reg Hennessy was critical of the plans.
"I would've thought in the two years they've had, they would have thought of something a little more imaginative than keeping people in our motels."
He said the community and businesses needed to know where the motels were.
With international tourism still on shaky grounds, he said domestic tourism would once again be crucial in summer for businesses' survival.
He said, in his view, Rotorua's reputation was "destroyed" and it was considered a dangerous place by out-of-towners.
Housing people in proper housing, and freeing up beds for the tourism industry, would change the reputation, he believed.
"Hopefully, if one thing comes out of it, the children are looked after a bit better."
However, Hospitality NZ accommodation sector Rotorua vice-chairman and Aura Accommodation owner Nick Fitzgerald said the move had "been a long time coming".
He said it was a positive and "significant" move for the city and wider tourism industry to have no more mixed-use motels.
However, he believed the motels being used should be made public.
Rotorua MP Todd McClay said the long-term government contracting of motels across the city was "a failure on their part to help these people who have been promised housing and are being let down".
"While I'm pleased they're focusing on families, it's frankly not good enough."
He said Rotorua would continue to pay the price as long as people were put into motels instead of houses.
However, Rotorua Chamber of Commerce chief executive Bryce Heard thought it was a "big step forward".
Heard said to have the motels chosen on the merit of how good they would be for families staying longer-term, separate to visitors, was a move away from the "totally ad hoc" way emergency housing had been handled and "absolutely" a step towards repairing the city's reputation.
But the underlying issue of the critical housing shortage needed to be addressed, he said.
At a council Operations & Monitoring Committee meeting last week, the council's strategy sustainability and social development manager Rosemary Viskovic said reducing the number of motels used for emergency housing from 45 to fewer than 30 would mean there were 30 motels and hotels available to visitors with more than 2000 units, not including Airbnbs, campsites, and backpackers.
Advice from Toi Te Ora and council teams guided what was best for families, including adequate kitchens and laundry facilities, sleeping spaces, and outdoor areas for kids.
Viskovic said while the initial use of motels at scale got people off the streets quickly, "it wasn't as well planned".
A Ministry of Housing and Urban Development spokesman said the Ministry of Social Development was talking with other motels about placements for other people who needed emergency housing, and the number of motels that would be used for this was still being determined.
"It's expected that overall the number of motels being utilised for emergency housing will decrease."
The council's district development deputy chief executive Jean-Paul Gaston said the shake-up was shaped by community concerns, and there would be safer places for families and children.
He said any contracted motels would need to be fully assessed against the district plan and the council was working alongside government agencies, their providers, and moteliers to make sure the process was managed efficiently.
Support
Rotorua-based social service providers WERA Aotearoa, Lifewise, Visions of a Helping Hand and Emerge Aotearoa have been contracted to manage the accommodation.
Their collective experience includes emergency and transitional housing, corrections clients, and families with mental health and drug addiction.
They were co-designing how their services would work and would assess, place and support people in emergency housing, based on a kaupapa Māori approach.
Viskovic said they were still working out their capacity and capability.
WERA currently has three vacancies for the motel-specific jobs, Visions of a Helping hand has at least two, and Emerge Aotearoa has four, according to SEEK listings.
Assessments on families began last week, and the "complex" process of moving people into allocated motels would take about two months, Viskovic said.
Staff would be on-site at motels, meaning they had a better idea of the needs and could also refer people to other services.
These providers were working with Te Taumata o Ngāti Whakaue to support whānau into housing through a housing hub, Te Pokapū, supported by MSD.
Whānau Ora chairwoman and district councillor Merepeka Raukawa-Tait said a monitor, independent of the government or agencies, was needed to ensure support services were consistent, competent and professional.
"Families need to know if they have issues they want to raise there will be no repercussions. These can be reported and followed up immediately."
HUD deputy chief Anne Shaw said the contracts were currently for about 12 months, with no current plans for more hotels, however they would continue to review the situation.
"Clearly, motels are not a long-term answer for housing, but we are working towards addressing the immediate housing challenges Rotorua faces, while more housing supply is built."
Addressing the housing supply
Last week, a HUD spokesman said the Government was taking a deliberate, Māori and Iwi Housing Innovation and place-based approach in Rotorua after investment in "critical" collaborative planning with Te Arawa and Rotorua Lakes Council to develop and create housing solutions.
Intensification and opportunities to build more public housing would be possible through recent district plan changes, supported by an urban growth partnership.
Local authorities and developers in the Bay could also seek funding through the Infrastructure Acceleration Fund, announced by the Government this week. Expressions of interest opened on June 30.
Public Housing Plan 2021-2024 - next steps for Rotorua:
• $55m shovel-ready investment to unlock land for development
• Work with council to give effect to the National Policy Statement - Urban Development for future growth
• Kāinga Ora has scaled up its build programme and is progressing further opportunities
