Republican mayoral candidate Nicole Malliotakis said Wednesday the city would be better off diverting $300 million that Mayor de Blasio plans to spend revamping its homeless shelter system for permanent housing for the poor.

Speaking outside the former Pan American Hotel in Queens, Malliotakis ripped the mayor’s controversial policy of sheltering homeless in hotels as “government dysfunction at its worst.”

“Instead of looking to build 90 [homeless] shelters — which is the mayor’s five-year plan — I am saying let’s instead look at saving properties like this, rehabbing them and working with nonprofits to provide supportive housing,” said Malliotakis.

She was joined by dozens of supporters, many of whom are Elmhurst residents fuming that the city converted the hotel for the homeless.

The city plans to stop using pricey hotels and private apartments as “cluster sites” to handle its rising homeless population by 2023 under a plan announced by de Blasio in February.

The plan calls for opening 90 new shelters citywide.

Malliotakis said the mayor’s plan is flawed because it’s set up to keep people in the shelter system rather than find them permanent housing.

“It’s bad for the homeless, the taxpayers and the [affected] communities,” the Staten Island-based assemblywoman said.

“We must stop the warehousing of the homeless in hotels. Though well intentioned, it’s not a helping hand, but a cruel sentence for many New Yorkers to life in limbo, stuck somewhere between the streets and an apartment on their own.”

She said the city would be better off building 90 new residential buildings on government land to deal with the homeless crisis but could not provide any cost estimates.

When pressed about how long she thinks it would take to implement such a plan, she said “five to 10 years” — roughly the same timeline de Blasio set for his goal to eliminate cluster sites.

When de Blasio took office in 2014, there were about 53,000 people living in shelters. As of Tuesday, there were 59,863, down from a record 62,674 last December.

De Blasio spokeswoman Jaclyn Rothenberg defended the city plan.

“High-quality transitional housing is far more than just a room to sleep in or a roof over one’s head. We’re ending the use of expensive clusters and hotels and replacing them with better shelters citywide, which will ultimately reduce costs for taxpayers. At the same time, this mayor is building more affordable housing than any mayor before him,” she said.

The city says it has closed more than 1,000 cluster sites since January 2016.