The government’s payment to emergency housing motels for loss is unclear.

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Unknown amounts of money are being provided to moteliers to pay losses suffered by emergency housing clients; authorities aren’t keeping track of what’s being spent and can’t put a complete amount on it.

That’s “not ideal” admits Minister of Social Development Carmel Sepuloni, who needs a framework that can help track costs and harm.

Demand continues to rise under a scheme in which motels and other facilities are paying on a monthly, or even marginally longer, basis to house people in desperate need of a place to stay.

RNZ continues to get shocking reports of what life is like for certain renters and moteliers, who are reporting persistent violence and gang abuse, as well as being confronted with knives and, in one instance, seeing a room burned to the ground.

Any housing conditions are described as “inhumane” by one of the government’s own ministers, and the new arrangement is described as “inefficient and unacceptable”

The cost of emergency and temporary accommodation is $1 million a day, with the vast majority – $900,000 – spending on the former, triggering calls for much more control of those areas identified as unsafe and crime-ridden. There are no arrangements between the Ministry of Social Development (MSD) and those that have the quarters, nor are there any clear responsibilities tied to the millions of dollars that are paid out.

Some moteliers are also speaking out, saying they’re being demonised while trying to do right by their guests; dealing with crime, intimidation and violence all too regularly – driving some out of business altogether.

National’s Nicola Willis asked MSD for information about any discussions with suppliers about “costs for damage or concerns over bad behaviour in their premises” in January and February this year.

General manager of housing Karen Hocking responded by saying that would be held with the “ministry’s frontline staff and recorded on individual email records or case files”.

The request was refused as it would require staff to “manually review thousands of individual emails and file notes… the greater public interest is in the effective and efficient administration of the public service”.

So what is the total cost for the first two months of this year? MSD can’t answer that either.

“Damages to properties are classified and paid out as ‘other emergency grants’,” – a fund in which payments aren’t specifically tagged to damage or loss in emergency housing.

Again, the request was rejected because staff would “have to review over 5000 individual files to determine if they were paid for property damage”.

It is difficult to put a number on how much damages are actually costing, but MSD says it will “secure a client’s undertaking to meet the cost of damages or loss in motels where there is evidence of damage”.

A security deposit “capped at the equivalent of seven night’s accommodation and payable where there is evidence of damage” is “available to help safeguard our suppliers in the event there are losses or damages caused by the client, or anyone else staying with them”, MSD says.

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“Damages or loss are charged to the client and they are required to pay it back to MSD at a rate that doesn’t cause them hardship.”

In the last three months of 2020 emergency housing grants on their own cost about $82.5m for 8500 clients.

System “not ideal”, minister says

Social Development Minister Carmel Sepuloni says the “majority of MSD clients who use emergency housing are good people who are looking for a roof over their heads while we help them find somewhere permanent”.

However, some people “have high and complex needs and can act out in ways which causes damage to motels”, she says.

When this happens, it is paid out through an emergency grant, and is then “recovered from the person who caused the damage”.

“I know this creates a debt to the people who have caused the damage, but it’s important that if someone damages property they are held to account for their actions,” Sepuloni says.

“MSD do work with the client to make sure the recovery doesn’t place them in undue hardship, but it is my expectation that the damage is recovered”.

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Social Development Minister Carmel Sepuloni wants a system that can better monitor the costs and the damage being caused. Photo: RNZ / Samuel Rillstone

Willis says she has been told “in addition to the very high rates motels are charging for emergency housing by the night, they are also claiming large amounts of money for damages that are done by emergency housing clients”.

It’s been “extremely difficult to get any information at all… I think that’s unacceptable, because taxpayers have a right to know what the total cost of emergency housing, is not just the nightly rate,” she says.

Sepuloni says any payment for damages is coded in the system as an “emergency grant (other)… as this is recoverable, MSD assign the amount as debt against the client”.

To collate the information would require significant manual effort, and Sepuloni admits the system is not “ideal… but the MSD payment system was set up prior to using motels for emergency housing, and is used for the wide range of payments MSD makes”.

Work is happening to “record these transactions differently in the system” but is still in “the early stages”, she says.

Sepuloni will “talk with MSD on whether there is a better way to capture this debt so that we can have a better picture of the damage being done to motel rooms”.

Willis questions why a government agency “responsible for millions of dollars of taxpayers money” is not being required to account for how that money’s being spent.

“And if one of the major drivers of cost in emergency housing are the damages that have been paid out to motels, why wouldn’t you monitor that?”

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“Covid-19” motels

One Canterbury motelier – who has since left the business – made six rooms available during last year’s lockdown for short term, urgent housing administered by the Ministry of Housing and Urban Development (HUD).

That was to give shelter to the homeless, the rough sleepers, those at the sharp end of the housing crisis.

“I had to have two rooms empty, I couldn’t open them to the general public because you can’t put members of the general public next to these people screaming and shouting and threatening each other with knives and stuff”, he told RNZ.

Furniture and rooms were trashed, he says, and in one instance burned down. The tenant had “stolen two e-scooters and he was trying to patch them together to make one good one and he got the wiring wrong and the battery exploded – that’s why the fire destroyed the room”, he says.

“Damages wise, I would say, I’d have to go back and look at all the invoicing but I’d say we’re up to about $30,000. And that was for just for 10 months. That’s not for a whole year.”

Carpets and coffee tables were ruined with cigarette burns, with one man falling asleep in the bed and he “must have had a cigarette in an outstretched arm, which then set fire to the couch” which was destroyed.

Frightening confrontations, too, while doing a routine room inspection; a man “obviously high on drugs, I knocked on his door and he just opened a door and lunged at me with a carving knife, you know, he didn’t know what he was doing”, says the former owner.

He has given up on the motel after the constant stress and physical danger.

“I walked away from it, with the family, because basically the family’s mental health was suffering as well.”

At its peak there were 1208 places in the “Covid-19” housing scheme; there are still about 1000 placements, but that number can fluctuate a bit depending on contracts.

HUD says it “only pays for damages in relation to motel places contracted as part of the government’s Covid-19 response to homelessness”. Its most “recent forecast” the cost of damages and laundry for the 2020/21 financial year was $1.6m.

“This is specific to our Covid motels places only and provided certainty for the motelier to contract with HUD for the purpose of urgently housing people during the national lockdown,” it said in a statement.

Moteliers feel “demonised” while housing NZ’s most desperate

Other moteliers are speaking out with similar stories.

Catherine runs a motel in Waikato and says they go “above and beyond for our emergency housing guests, for example driving them shopping, taking them to court appearances, marae doctor visits, hospital visits, food bank deliveries etc. etc… free of any charge”.

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They’ve also built a fenced playground, installed CCTV and “due to the issues/dramas we have encountered over the last 15 months now have extremely strict rules that everyone must abide by otherwise we will not have them staying here – end of story”.

That includes no visitors except known whānau and friends, school age children must attend school and the motel “functions here as a small community where everyone is supported by each other, where respect for each other is expected”.

Many are flourishing, she says, but the problems run deeper – which she experienced personally.

“My life was threatened with a potential knife attack in February by a synthetic drug user mother” who had lived in Catherine’s motel for more than a year.

“I’m still traumatised,” she says quietly.

RNZ has been told, however, of several instances where motel owners are not having rooms cleaned regularly or restocking them with towels and linen, high nightly rates are charged, MSD clients are treated with disrespect and there’s little or no effort to keep the place safe.

Catherine says there should be some kind of system for recognising those providing a good service and helping people into permanent housing, as opposed to those just pocketing the money, as well as guidelines for providers to follow.

There is one solution everyone agrees is needed – build more houses.


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