$100m housing problem

Putting homeless New Zealanders up in motel rooms was meant to be a short-term fix by the Government. But three years on, there are 3000 households in motels and it is costing more than $100 million a year.

A temporary scheme to place homeless people in motels for a week has become so entrenched that thousands of families are stuck in their makeshift homes for up to a year. Initially a small initiative to address rising demand for public housing, the use of government-funded motels has rapidly grown into a $100 milliona-year problem.

Motel rooms are not only expensive — owners charge around three times the average rent — they are insecure and unsuitable accommodation for families and people with difficult backgrounds.

One region, Hastings, has become so fed up with the high numbers of people getting stuck in motels that its council is urging businesses to house their own staff so more rental properties can be freed up.

And while this Government says it is unhappy about the dependence on motels, it has been warned that the housing pressures which led to a blowout in their use are likely to get worse before they get better.

The use of motels for emergency and transitional housing began under the previous National Government in 2016. The Labour Party criticised it at the time, saying it showed how bad the housing shortage had become.

Yet the use of motels has expanded significantly under this coalition Government. In a briefing to new Housing Minister Megan Woods released last week, Treasury said 1899 households were using private motels for emergency accommodation. A further 779 households were in government-contracted motels for transitional housing.

“The Government is not happy with having to have motels serve as transitional housing,” Associate Housing Minister Kris Faafoi said.

“But it is a better emergency option than people being forced to live in more unsafe, unhealthy forms of accommodation.” The Government is undertaking the biggest public housing construction programme in 40 years, he said.