Motels make millions amid homeless surge

One motel has raked in close to $16 million housing the homeless during the Covid-19 pandemic.

It is one of more than 200 providers who earned millions from the Government as the country grapples with a housing crisis and the soaring cost of living. New figures show the Ministry for Social Development (MSD) paid out a total of $788m to house 37,887 people between March 2020 and July 2022.

National MP Chris Bishop has branded it a ‘‘get-rich-quick scheme for motel owners’’.

Figures released to Stuff under the Official Information Act show MCentral Apartments in Manukau, South Auckland, is the top earner. It received $15.8m to shelter 621 clients.

It is followed by Hamilton’s Anglesea Motel and Conference Centre, which was paid $11.7m to house 408. Kerrs Motel and Homestay, also in Manukau, was paid just over $11.5m for 1299 guests.

The providers paid the highest amounts are all in the North Island, corresponding with higher house prices and rents.

In the top 10, four are in South Auckland and three in Hamilton. They all earned over $8m, accounting for 12% of all the spending ($96,859,376). Just 83 providers (out of 1540) accounted for half of all the money received.

In the Wellington region, Lower Hutt’s Angus Hotel was ranked 15th highest earner, on $6.7m for 471 clients. The Set Up serviced apartments in the CBD received $6.3m, and hosted 627 people.

The Athena Motel in Christchurch’s Riccarton suburb is the South Island’s biggest earner, netting $1.6m for 53 guests.

Karen Hocking, MSD’s general manager of housing, acknowledged a growing demand for emergency housing.

‘‘The year 2020 saw a significant increase in demand for emergency housing, as the ministry supported people through the Covid-19 pandemic period with accommodation where they could safely selfisolate,’’ she said. ‘‘Due to the Covid-19 lockdown restrictions, people also could not easily move out of emergency housing into long-term accommodation, which contributed to longer durations of stay and higher costs.’’

Hocking said motels were not a long-term solution, especially for those in a vulnerable situation. She noted a small number of the total provided to Stuff had been miscoded.

Bishop, the party’s housing spokesman, said the Government was spending over $1m a day on motel accommodation. ‘‘The Government has just basically written out increasingly large cheques and tried to wash their hands of the problem of people on the state house waiting list . . .’’