A group of Rotorua citizens is calling for the council to give six resource consent applications for emergency housing to an independent commissioner to consider.
Yesterday, Restore Rotorua Inc released a report by NERA Economic Consulting saying using more motels and hotels for transitional housing for the homeless could cost millions in lost tourist spending a year and lead to job losses and business closures.
It also criticised the council for not consulting the public before granting consent for Boulevard Motel on Fenton St.
It has now gone a step further, calling for an independent commissioner to oversee the consent applications for CBD emergency housing currently being considered by Rotorua Lakes Council.
Rotorua mayor Steve Chadwick said the current housing crisis was an "incredibly complex situation" for which all possible solutions were being explored.
Restore Rotorua Inc chairman Trevor Newbrook said the council needed to "stop and fix the emergency housing problems in the CBD."
"The council needs to notify and let the most affected comment."
Boulevard Motel and the six other application locations were "all concentrated within a 2km radius".
In his view, the council must consider the cumulative effect of transitional housing, rather than each resource consent application individually, for "the full effects to be ascertained".
While elected members are not involved in the consenting process, Chadwick said the council was very aware of the community's concerns about the housing crisis.
"The use of motels is a short-term response to a dire situation that is happening right now," she said.
"The Rotorua Housing Taskforce is working toward a system that enables controlled use of motels for a temporary period of time. More houses for Rotorua has always been the long-term goal."
She said the taskforce was exploring "all possible solutions" to find homes for those in need.
"I'm aware that members of Restore Rotorua Inc have been engaging with council staff and I encourage that engagement to continue. We all need to be working together to find the right solutions for Rotorua.
"In terms of accommodation capacity, Rotorua Economic Development has continued to assure the community that there is plenty of accommodation for people wanting to visit Rotorua.
"We are continuing to see strong interest in events for our community, despite the challenges of the pandemic, and MIQ hotels will eventually return hundreds of rooms to the accommodation stock."
Rotorua MP Todd McClay said he was in full support of Restore Rotorua Inc's initiative.
McClay said he had residents getting in touch daily with concerns about the impact of emergency housing on Rotorua's reputation.
"It is a real concern for Rotorua. We had a very positive reputation, I think it has now changed. I don't think Rotorua is the first choice for visitors anymore.
"I'm hearing from people who are affected when they are in the carparks of supermarkets with their families, intimidation around McDonald's - generally things that people are seeing on Fenton St."
He said Restore Rotorua approached him for advice and he encouraged them because, in his view, "they are representative of the views of the community".
Labour MP Tamati Coffey said the narrative around emergency housing in Rotorua had to change.
"Creating an 'us and them' situation is unhelpful for a cohort of people that are vulnerable and in need of support," he said.
"This cannot turn into a situation where those who can pay the best lawyers or consultants win. All issues that we face together as a city, are ours to solve - together.
"I welcome an invitation by this group to talk through their concerns and figure out how the solution can be inclusive."
Rotorua Economic Development chief executive Andrew Wilson previously said Rotorua still had the ability to accommodate significant numbers of visitors.
He said accommodation stock in Rotorua had not been affected by MIQ facilities or social housing and aside from "a few weekends" each year when capacity was reached, there was always room available.
"Prior to the August lockdown, the visitor industry was experiencing a positive upturn in business activity and this year's June school holidays were much busier compared to the same period in 2019.
"In our quarterly monitoring of perceptions toward Rotorua, we note positive views of our city far outweigh any negative views."
Hospitality New Zealand Bay of Plenty branch president Reg Hennessy said he supported anyone attempting to solve the problem.
"Of course I'm concerned and worried for Rotorua businesses and my business if we keep losing accommodation because that's what we're all about.
"We have two major concerns, this one and Covid."
Kāinga Ora Bay of Plenty regional director Darren Toy yesterday said Kāinga Ora was exploring options to provide more warm, dry homes for Rotorua including purchase, lease, development and partnership housing.
"We would be interested to talk with the Restore Rotorua group about our intentions, as well as explore with them any opportunities they may be aware of which could support the pressing need for more housing for people in the city."
Police are seeking dashcam footage of the vehicle involved in the incident.