Motel bills 25 times bigger than expected
WELLINGTON: Putting homeless families into motels is costing the Government 25 times more than it anticipated at $140,000 a day.
Deputy Prime Minister Paula Bennett has admitted that when the Government came up with the plan to help those struggling with the housing crisis, they had no idea how much it was going to cost.
In just a year, the Government is expected to spend $50 million of taxpayer money on motels and emergency accommodation rather than the $2 million it set aside for special needs grants last year.
‘‘We had no idea how much it would cost. No government has ever picked up the bill for this before,’’ she said on Newshub’s AM Show yesterday.
‘‘No government has ever funded emergency housing before.’’
Figures obtained by NZ Newswire under the OIA show the Ministry for Social Development had anticipated spending only $2 million a year on motels, based on ‘‘assumptions’’ of helping just 1400 singles and families.
A breakdown shows MSD assumed it would cost $860,000 a year to house 700 single people in a singlebedroom motel room at an average cost of $175 a night for seven nights.
A further $1.18 million was expected to be spent housing 700 families in twobedroom motel rooms at $240 a night for seven nights.
In a response from the department’s deputy chief executive, Scott Gallacher said the department made ‘‘assumptions’’ around the cost and noted demand ‘‘has been higher than anticipated’’.
Expenditure is not capped, meaning it is difficult to tell how much the non recoverable emergency housing grants could cost the Government.
Already, 3000 people have received SNGs for hotel stays, according to Social Housing Minister Amy Adams.
She admitted motels were not ideal but were preferable to sleeping rough during the winter months.
‘‘Our priority is that those in urgent need have a place to stay while we secure them a social house,’’ she said.
The number of social housing spaces had grown, according to the latest social housing quarterly report to June, but so too had the number needing help, she said.
Labour has criticised the Government for not building enough emergency housing, and Ms Bennett admitted it was slow to act.
‘‘We’ve got a massive build going on. In hindsight, we should have started it earlier,’’ she said.
Figures released on Thursday show 30 times as many families need emergency housing in motels than the Government had expected.
‘‘National thought they would need to issue just 350 emergency housing grants for motels every three months. In the last three months, they issued 11,446,’’ said Labour’s housing spokesman, Phil Twyford.
‘‘The cost has risen by twothirds in just half a year, from $7.7 million in December to $12.6 million in June.’’ — NZN