Motel millions paid amid crisis
Twenty Waikato providers have cashed more than $100 million for housing the homeless during the Covid-19 pandemic.
They are just some of more than 200 providers that earned million-dollar sums from the Government during the Covid-19 pandemic as the country grapples with a housing crisis and the soaring cost of living.
Figures released to Stuff under the Official Information Act showed the Anglesea Motel and Conference Centre – the top earner in the region and second place nationally – was paid $11.7m to house 408 people.
A Waikato motel group leader said some were making good money on the back of a housing shortage, but a worker noted that emergency housing guests are more difficult to deal with than others.
Motels doing emergency housing were well paid, Waikato Motel Association president Narinder Sagoo said.
‘‘It’s guaranteed government income.’’
He said there was risk for motel owners in taking on these types of bookings – they involved people on the edge of society who didn’t have a good credit reference and who often had ‘‘domestic’’ issues.
Motels were able to charge a premium on top of nightly rates because of this, Sagoo said.
He said the Government had not been able to deal with its shortfall of housing stock – and the private market had shunned those in need.
‘‘It was a great thing at the time. The Covid priority was that no-one should be wandering around. They needed to be taken off the streets. If anything, that $100m has transformed our industry. It’s no longer just tourism – it’s social housing.’’
The money came from Ministry of Social Development Emergency Housing Special Needs Grants, which were introduced in 2016 and available to people who could not remain in their usual place of residence, if any, and did not have other acceptable accommodation.
Figures showed the ministry paid out a total of $788m to house 37,887 people between March 2020 and July this year.
The providers paid the highest sums were all in the North Island. MCentral Apartments, in Auckland’s Manukau, earned the most, receiving $15.8m to shelter 621 clients.
Of the top 10, four were in south Auckland and three in Hamilton. They all earned more than $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.
Sagoo said the Waikato Motel Association was proactively working with the industry and was focused on the future, when accommodation shifted back out of social housing. ‘‘Those people came from somewhere. It won’t be like this forever. Houses are being built left, right and centre.’’
A staff member at an emergency housing provider, who spoke on the basis of anonymity, said prices started at $350 for one day for a single person. ‘‘For better behaviour we charge less. Bad behaviour we charge more.’’
For a family of five or six people, with adults and children, prices were about $700 a day.
She said emergency housing clients were in their rooms all the time, used more power, and caused damage. ‘‘Adults argue or fight and don’t care about our furniture. Kids paint on the walls and furniture.’’
When asked if it was worth the extra money, she said there was no tourism two years ago so motel owners had no choice.
Karen Hocking, the ministry’s general manager of housing, acknowledged a growing demand for emergency housing and attributed it to a shortage of affordable housing and rising rents. ‘‘The year 2020 saw a significant increase in demand . . . as the ministry supported people through the Covid-19 pandemic period with accommodation where they could safely self-isolate.’’
She noted a small amount of the total provided to Stuff had been miscoded.