Cedar Lodge Motel received $211,974 in the quarter ending in March from emergency housing grants.

Government-funded emergency housing is core business for some motels.

And demand is at a record high.



One Hamilton motel received more than $200,000 of taxpayer money in three months alone through the programme.

Figures released by the Ministry of Social Development through the Official Information Act show some accommodation providers are cashing in on New Zealand's housing crisis.

MARK TAYLOR FAIRFAX NZ Gardena Court Motel received $86,800 in the March quarter from emergency housing grants.

Taxpayers' Union executive director Jordan Williams has questioned the government's approach and thinks there must be a more cost-effective alternative.

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In July 2016, the Government's $354 million emergency housing grant was launched - the first time permanent funding had been set aside - and uptake was significant.

MARK TAYLOR FAIRFAX NZ B-K's Settlers Motor Lodge received $35,980 in the December quarter from emergency housing grants.

The OIA request around Emergency Housing Special Needs Grants issued for a list of 23 motels in Hamilton was initially declined, but once asked to provide a written reason for declining, the ministry decided to grant the request in part.

The information released showed that Cedar Lodge Motel received $211,974.39 for 135 grants in the 2017 the March quarter.

There is a maximum per-night rate for commercial accommodation. For an individual or couple without children, the rate is a maximum of $40 a night in a hostel or $140 per night at a motel. The maximum amount for people with children ranges from $140 per night to $260 per night.

FAIRFAX NZ Figures from MSD for the December quarter show the number and cost of the Emergency Housing Special Needs Grants by Work and Income.

However, where accommodation options are limited or people have exceptional circumstances, staff have discretion to pay a higher rate.

Rachael Shadbolt, who is the accommodation general manager for Hospitality New Zealand, said demand for emergency housing had increased significantly - beyond what anyone could have imagined.

She said for some operators, it is a core line of business and, despite this, the operators get the normal rate.

"They get the rate of the day. It's booked at quite short notice, they can only book for seven days and a week prior. They get the rate available to any other guests.

"We've always said we are not the solution to the problem, we're more of a Band-Aid solution."

Williams said the grants were a necessary cost, but thought leasing whole motels was a better solution.

"Given that the New Zealand government now appears to be the largest consumer of motel accommodation in New Zealand, why aren't they getting special rates?

"The fact that the government has to use hotels shows how bad the housing crisis has become. If the alternative is people sleeping in their cars, then it's a necessary cost, unfortunately, but that doesn't get the government off the hook when it's caused the crisis in the first place.

"Why aren't they just leasing whole hotels now, now the numbers are so high?

"Why are they doing it on such a bespoke basis, which, of course, just drives the cost up?"

Multiple requests for an interview with Ministry of Social Development deputy chief executive for housing Scott Gallacher were declined.

Gallacher responded to questions via email.

He said staff help clients to identify suitable short-term accommodation options and MSD does not refer people to commercial accommodation providers. The decision on where people stay remains with the individuals.

He said staff look for the most cost-effective appropriate solution and use guidelines on the maximum per night rates for commercial accommodation.

On Tuesday, it was revealed that the ministry was looking at purchasing one of the top motels in Blenheim to provide emergency accommodation.

When asked if the ministry were considering purchasing a motel in Hamilton, no direct answer was given.

Gallacher said in Hamilton, the ministry had secured more than 20 transitional housing places and was working with providers and the community to secure more places by the end of the year.

"Those additional places will be delivered in a range of ways, including the use of vacant Crown properties, or by leasing and/or purchasing existing properties.

"Due to normal commercial sensitivities, we are not in a position to confirm details of specific options at this time."

Associate Housing Minister Alfred Ngaro said the Government has made a commitment to help people who find themselves in crisis with nowhere to stay.

"That's why we introduced the SNG.

"We have new transitional housing and social housing places coming on board all the time, and as these places become available, we're putting our clients in these rather than in motels.

"Commercial providers, of course, set their own rates. My expectation is that MSD keep payments within the maximum nightly room rates wherever possible and that staff look for the best deals. My understanding is that those maximum rates meet the needs of the majority of those who require the SNG.

"Motels and the SNG aren't the end game, and we're looking at a number of options to meet our transitional housing goals."

Dollar value of Emergency Housing Special Needs Grants approved for accommodation in Hamilton for March Quarter:

- Anglesea Motel & Conference Centre: $26,980

- Ashwood Manor: $90,945

- Cedar Lodge: $211,974

- Classic Motel $12,011

- B-K's Settlers Lodge $35,980

- Gardena Court: $86,800

- Manhattan Lodge: $11,913

- YHA Hamilton Microtel: $4552