Will the city’s reputation be strengthened or has its housing problem simply been shuffled around?

The end of contracted emergency housing in Rotorua is under way, with consent for one of the last seven contracted hotels providing emergency accommodation in Rotorua ending today. The last motels in the city contracting as emergency housing are set to return to regular business as their government consents expire. The reduction in suppliers, especially motels, is part of a government push to reduce the number of households in emergency housing.

Last Friday, associate housing minister Tama Potaka announced the government had achieved its target of reducing the number of households in emergency housing around the country by 75%, five years before the initial target date. In the release, it said the number of families in emergency accommodation had decreased from 3,141 households in December 2023 to 591, a drop of 81%. Māori make up 60% of households receiving emergency housing grants and approximately 46% of households in emergency accommodation are sole parent households. Around 83% percent of sole parents in New Zealand are women.

The Geyser City, a top tourist destination, has been grappling with emergency housing issues since the Covid-19 pandemic. Some have claimed the associated issues have negatively impacted the city’s tourism industry. In 2020, the Rotorua Lakes Council called on the government to focus its attention on Rotorua to help develop short, medium and long-term solutions to the housing crisis. 

In May 2021, the government announced funding to provide suitable accommodation for rough sleepers, aiming to reduce occupancy in high-density accommodations such as night shelters and hostels and reduce the impact of the virus. Two months later, cabinet agreed to fund a series of actions to improve the provision of emergency housing in Rotorua, including contracting specific motels to house families with children, providing wraparound support and establishment of a housing hub with local iwi.

At its peak in November 2021, there were 4,983 households in emergency accommodation. In December 2021, there were more than 60 motels and hotels operating as emergency housing in Rotorua, with 13 registered and consented suppliers. People in need had a place to stay, the transmission of the virus was likely to slow down, and the accommodation providers usually reliant on a strong tourism market had a desperately needed source of income. 

By the end of 2023, 163 households were living in contracted motels in Rotorua, including 252 children. As is common with any concentration of people living in financial poverty, issues came to the fore. The city centre became riddled with violence, drug use, gang activity and antisocial behaviour. Residents claimed there was more rubbish around and said they felt unsafe in the central city, especially Fenton Sreet, where a large number of emergency accommodation providers were situated. Unhappy with the widespread use of emergency housing in their city, locals called for change – they wanted the contracts with emergency housing suppliers terminated and the people living there gone. The issue became national news and Rotorua was soon synonymous with emergency accommodation and the associated issues.

Reducing the number of households reliant on emergency housing was an election campaign promise from the National Party. In December 2023, the government began planning for the establishment of a priority category for families with children on the social housing waitlist, eventually named the Priority One pathway. If these families had been living in emergency accommodation for more than 12 weeks, or in contracted emergency housing motels in Rotorua, then they would be given priority for social housing. Over 500 of the 800 families estimated to be eligible for priority identified as Māori. 

A cabinet paper on ending the large-scale use of emergency housing was introduced in March last year, with a supplementary report titled “Tightening the Gateway into Emergency Housing”. It outlined concerns about how long families were staying in emergency housing, noting “legislative settings do not support or incentivise people to exit emergency housing – there are limited responsibilities while in emergency housing and a lack of effective consequences if responsibilities are not met”.

In the government’s promoted efforts to “tighten the belt” on spending, it projected a saving of $351m over five years by dramatically reducing the number of households in emergency housing. From November 1, 2019 to March 31, 2024, $1.47b in emergency housing grants was paid out at an average cost of $273 per night per household. There was $74m spent on administrative costs relating to emergency housing over the same time period. 

In November last year, when the number dropped below 1,000, Potaka stated that 786  households previously in emergency housing had been placed in social housing through the “Priority One” pathway. He also said fewer applications for emergency housing were being accepted, and requirements to remain in emergency housing had been tightened.

Potaka said the government had achieved its target by implementing the priority policy – where families with children would be expedited to the top of the priority list for social housing – and ensuring a steady supply of that social housing. Of the 2,550 households that were no longer in emergency accommodation, Potaka said “about 80%”, or 2,040 households, were now staying in social, transitional, or private housing with some kind of government support such as the accommodation supplement. It was unclear where the remaining 20%, or 510 households no longer in emergency accommodation had gone.

Another step taken by the government was to reduce the number of grants given to applicants for emergency accommodation, with no new referrals planned after June 2025. However, the supplementary analysis report for the cabinet paper acknowledges that solely reducing the number of grants would not necessarily solve the problem.

“There is a risk that tightening the gateway will result in increased levels of homelessness, rough sleeping and overcrowding,” read the report. “The risk of increased homelessness creates a risk of associated negative outcomes, including health, employment, educational and psychosocial impacts, with flow-on costs to government and the community (including potential impact on other government targets e.g. increased student attendance).” 

Resource consents for the remaining seven contracted motels in Rotorua were granted last year for a gradual exit. The first consent ends on January 27, 2025, with Apollo Hotel Rotorua no longer being a registered provider of emergency accommodation. 

While the likes of Rotorua mayor Tania Tapsell have praised the exit plan as a step towards restoring the city’s reputation, others like Labour housing spokesperson Keiran McAnulty and independent hearings commissioner David Hill have highlighted issues with the reliance on assumptions about social housing availability, especially given recent budget cuts. In short, more social housing is needed for people in emergency housing to move into but the supply of social housing is not promised, especially with a restricted budget.

While the policy changes mark progress in reducing a visible reliance on motels, it remains uncertain whether the root causes of the city’s  housing crisis are being addressed or simply displaced. Does this milestone signal a true solution to the housing challenges, or is it merely a temporary reprieve that risks deepening the crisis elsewhere?