A person is undergoing quarantine in an Auckland Kāinga Ora housing complex.
Kāinga Ora confirmed to the NZ Herald one person was in quarantine in public housing in Beach Haven on the North Shore - where two people recently tested positive for the virus.
It is understood the second case found at the complex is in MIQ.
A Ministry of Health spokesperson said they wouldn't comment on individual cases, including why an exemption for home quarantine may have been approved.
Anne*, whose daughter lives at the housing complex in question, claims her daughter was told by a security guard - which had been stationed outside the complex since last week - that the Covid-positive person was quarantining in the community because MIQ was full.
However, it is understood MIQ was not full and this was not the reason the Covid-positive person was isolating at the complex.
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Anne, who has severe chronic inflammatory lung disease, said she was annoyed a Covid-positive person was allowed to isolate in the same building as her daughter and grandchildren, with whom she shared a bubble.
"My lungs operate at 30 per cent, it's not good," she said.
"It angers me, it really angers me because ... I know if I get Covid, I will be one of those people who don't survive."
Fortunately, Anne was double vaccinated and her daughter had returned a negative test result over the weekend.
However, Anne was still concerned transmission could occur given the complex had shared rubbish bins and residents were in close proximity to one another.
"[My daughter's] keeping all of her doors and windows shut, she's terrified to open them.
"It's just too close to home."
She said it would have been preferable for residents to be informed by public health staff of the situation, and what health and safety measures were in place, instead of finding out through the grapevine.
A Kāinga Ora spokesperson said thousands of people in public housing had been contacted over the past eight weeks to ensure they had access to essential services.
Health and safety arrangements had been made by Auckland Regional Public Health at the Beach Haven facility, including on-site security at all times to ensure the person was properly isolated.
The complex in question was being cleaned twice daily, in addition to prior testing and vaccination efforts for residents.
It is understood this is the sole instance of a Covid-positive person isolating in a public housing complex.
There are currently 16 exemptions in place allowing people to self-isolate at home across a number of households, the Ministry of Health spokesperson said.
Since the start of the outbreak, 46 exemptions had been granted.
At yesterday's 1pm press conference, Covid-19 response minister Chris Hipkins said the management of Covid-positive people was under review in light of the number of cases being found in the community.
In the past, all positive cases had been moved to an MIQ facility unless it was more appropriate for them to isolate at home.
However, Hipkins confirmed that recently, the MIQ system had reached its peak in how many positive cases it could manage.
This indicated the need to alter how positive cases were handled, which included home isolation. He wouldn't give any further details on how the system would be changed.
The Ministry of Health spokesperson said they worked closely with the Ministry of Business, Innovation and Employment to ensure there was a sufficient supply of quarantine rooms.
In some cases, exemptions to isolate at home are granted by the relevant medical officer of health following a risk assessment, which considers health status and needs, disability supports, social and welfare needs, safety, compliance, and suitability of alternative options.
A plan is then formed for the affected residents to follow which includes support arrangements for the person or whānau, and 24/7 security if required - to ensure unauthorised visitors do not enter the home.
The latter is to ensure unauthorised visitors do not enter the home, to provide a level of protection for the family and to ensure exemption criteria are adhered to.
The exemptions require household members to stay at home, except for testing, until they have finished their self-isolation period.
Anne is a pseudonym to protect her identity.