28 Mar 2017

Motels given millions to house homeless

5:49 am on 28 March 2017

Five Auckland motels have received more than $1.3 million of taxpayer money in just three months to house homeless people.

Figures obtained by Checkpoint with John Campbell under the Official Information Act show in the three months ending 31 December 2016, the Budget Travellers Inn in Papatoetoe received $351,958 in emergency housing special needs grants from the Ministry of Social Development (MSD), the highest of any emergency provider in New Zealand.

Alfred Ngaro

Social Housing Associate Minister Alfred Ngaro Photo: Supplied

The grants are given to people "when all other options are exhausted, to provide a short-term solution", but Salvation Army social policy unit director Ian Hutson said the situation could have been avoided.

"What we're reaping is related to the lack of early intervention, and ideally we don't want more and more emergency accommodation, what we want is affordable housing," Mr Hutson said.

Rounding out the five providers given the most grants were the Knightsbridge Motor Lodge in Papatoetoe, at $334,578; 540 Motel in Otahuhu, at $242,187; the Allenby Park Hotel in Papatoetoe, at $220,750; and the Rockfield Motel in Penrose at $199,649.

In total, the ministry granted 8860 grants to 2616 people in the last quarter of last year - at a total cost of $7,735,788, or an average of about $2.5m per month.

Associate Minister for Social Housing Alfred Ngaro said the government was working on other options.

Another 2250 social housing places were on the way, and the government was considering purchasing more motels.

It was paying on average $140 per night per room in the hotels being used, he said.

"In Auckland, there are already 2250 new social housing places in the pipeline. We're working towards that goal, we've got a budget to add to that, so that's 1400 social housing places, we've got the community housing providers that have committed another 850 places, that makes up the 2250."

Mr Ngaro said that was still on track and the government was working quickly to make sure the demand could be met, particularly in Auckland.

Cimarron Motel

Cimarron Motel in Auckland was purchased by Housing New Zealand last year to house people with nowhere else to go. Photo: RNZ / Eva Corlett

The government has already purchased one motel in Takanini, and Mr Ngaro said in some cases purchasing or procuring a hotel was still the best option.

Under the scheme, families of five or more can be given up to $260 a night - or $1820 a week.

In comparison, the median rent for a three-bedroom home in the south of Papatoetoe is about $500 per week.

"You can see how much better that would be spent paying rent on an affordable house that someone can live in for a long time, rather than a house that might only be for a few months at most and getting moved on. That's not ideal. You want a permanent dwelling, a stable family life," Mr Hutson said.

Emergency housing grants a 'band aid'

If the current level of demand stays the same, the government will spend more than $30m a year placing homeless people in hotels and motels.

Under that scenario, its four-year emergency grant budget of $41 million would be used up in just 15 months.

Mr Hutson said he expected those numbers to stay the same for the foreseeable future.

"Last year, people saw how big the issue has become ... all sorts of agencies were really struggling. I think what they've done, the government, to their credit, is to respond and they've responded significantly.

"But as we've been saying, basically, is that's all good in the short run, but the real problem is longer term - it's only a quick-fix band aid."

Grants do not need to be paid back, unless the recipient behaves inappropriately during their stay or if they are proven to not be doing everything they can to help themselves.

Of the more than $7.7m granted in the last three months of last year, just over $800,000 - or 11 percent - is technically recoverable.