Bill for emergency housing skyrockets
The Government spent almost $100 million of taxpayers’ money to cover the cost of emergency housing for the first nine months of 2019.
Figures released under the Official Information Act show the Ministry of Social Development paid out $99,007,197 in emergency housing special needs grants (EH SNG) until the end of September – a rate of $11m a month.
Even without figures for the last quarter of 2019 the spend on emergency housing was almost double the $52,415,832 spent for the whole of 2018.
MSD general manager housing service delivery Karen Hocking said, as the housing crisis continued, the cost to taxpayers was expected to rise again in 2020.
‘‘The number of EH SNGs issued in the Financial Year 2019 and the average cost of the grants is tracking above budget forecast levels and we expect that trend to continue in 2020,’’ Hocking said.
‘‘This reflects the shortage of affordable housing, as well as the Government’s commitment to ensuring that those in need have somewhere warm and dry to stay,’’ Hocking said.
In 2019 the highest amount was spent in Auckland Metro, where $42.2 – at an average of $246.56 a night – was spent. This was well above the total of $26.4 – at an average of $213.89 a night – spent in the same area for all of 2018.
Waikato and the Bay of Plenty experienced the biggest increases where the cost more than tripled for the first nine months from $5.4m to $15.6m and $4.4m to $13.8m respectively, when compared with the totals for 2018.
In Taranaki the cost almost tripled from $258,477.57 in 2018 to $758,314.14 for the first nine months of 2019.
The average cost per night was also increased across the country’s 12 regions.
In Wellington it jumped from $4.6m in
2018 to $8.4m for the first nine months of
2019, and in Canterbury the increase was from $1.4m to $2.6m.
Hocking said the grants were available to people who could not remain in their usual residence and did not have access to other accommodation which was adequate for them and their family’s needs.
The ministry paid the accommodation supplier directly and assistance was generally granted for up to seven nights but could be extended depending on the circumstances.
She said it was important to note more than 50 per cent of those accessing the grants only required up to three before they secured more suitable accommodation
The ministry recognised motels were not a long-term solution but a short-term option while more sustainable alternatives were progressed, Hocking said.
There were a number of reasons some people may struggle to access suitable housing including a lack of supply or not being able to meet the high cost, which could result in them receiving the grant for an extended period of time.
‘‘There is also a distinct group of people that face a range of complex issues that are a barrier, such as mental health and addictions, criminal history or family violence.’’
Others needed to live in specific areas to access specialist care or educational needs for them or their family.
Hocking said the suppliers set the room rate and a number of other factors could also influence the cost of emergency housing, including the composition of households and the location.
‘‘Larger families may require multiple units, which increases the cost per grant. Similarly the cost of commercial accommodation varies by location.
‘‘Where there is high demand for tourist accommodation and emergency housing, as is the case in places such as Rotorua, the cost of Emergency Housing is higher and contributes to an overall increase in the cost per grant.’’
She said the ministry was working to reduce the demand for emergency housing through measures including intensive case management and navigator services to support people to access and sustain long-term housing and by helping clients retain their existing housing through payment of a new rent arrears assistance housing support product.