A Hawke's Bay hotel that earned $1.5 million in nine months from housing people in emergency accommodation has stopped because it was "too much hassle".
Figures show that the top two Napier emergency housing providers earned a combined total of $4,324,869 in the nine months to March 2021.
In figures released to Louise Upston, National's Social Development and Employment spokeswoman, Bluewater Hotel Ltd earned $2,766,030 for the nine-month period and The Nautilus Napier earned $1,558,839.
They were the only Hawke's Bay emergency housing providers ranked in the top 50 nationwide earners for the period.
But a spokesman for Nautilus Napier said they were no longer providing emergency accommodation.
"We stopped providing emergency accommodation three months ago," he said.
"It's too much hassle to keep an eye on people.
"They were causing too much disruption - damage to rooms.
"I just don't do it any more, but if a pregnant woman came to the door needing accommodation I won't turn her away, it's humanity."
He said the $1.55m his hotel earned could be down to the November floods in Napier, which displaced hundreds and caused millions of dollars of damage.
"We ended up helping quite a few people, families because of the floods."
Upston said the "dramatic increase" in payments to moteliers was proof that the Government had ignored official advice that week-by-week motel accommodation was not suitable for families or people with high needs.
"The use of motels for emergency housing is putting increasing pressure on police resources - and police are frequently responding to reports of violence, intimidation, public urination, drug deals and gang involvement at emergency housing motels," Upton said.
"The fact that emergency housing and crime has been identified by police as a major focus for its operational deployment signals how serious this crisis is.
"The Government must stop placing vulnerable families in motels without adequate support or regard to the risks they are exposed to. Leaving over 4000 children to live exposed to violence, drug use and gangs is an utter disgrace."
In response Minister for Social Development and Employment Carmel Sepuloni said National "failed" to properly invest in the additional supply of public housing.
"The housing crisis did not start in the last few years, it is a result of decades of inaction," Sepuloni said.
"This means that in parts of the country vulnerable New Zealanders are unable to find or afford an appropriate place to live."
She said as of March 31 there were 161 households in Napier emergency housing and 84 in Hastings.
"While we have seen numbers of people accessing Emergency Housing fall, the amount of time people are spending in emergency housing has increased," Sepuloni said.
"HUD (Housing and Urban Development), MSD and non-government organisations are working together to link people into more appropriate long-term accommodation and are having some success."
Sepuloni said emergency housing was a "temporary solution", but was better than forcing people to live in cars, or in tents.
"However, we do recognise the need to find better ways of delivering Emergency Housing, while we wait for additional houses to be built," she said.
"The Government has begun work to change the model used for Emergency Housing, beginning in Rotorua.
"Once this work is under way we will look to expand it further to other towns and cities across New Zealand."
A spokesperson for Housing Minister Megan Woods said across government, there was a major programme of work under way aimed at increasing the supply of public housing and improving housing affordability and supply.
"Ultimately this is a long-term solution to the Emergency Housing issue, but we are on track for 18,000 new Kainga Ora homes by 2024," they said.
The spokesperson added that Hastings was one of the first places where HUD rolled out its place-based approach. This was in recognition of the housing need in the area.
"The Hastings place-based approach is making good progress in understanding the specific housing challenges in Hastings and tailoring responses for them."
The Hastings District Council received $12 million of shovel-ready funding in 2020 for infrastructure to enable housing, the spokesperson said.
"The council has combined this with local investment, to develop a range of sites and housing typologies on council-owned land, including medium-density housing and progressive homeownership.
"Community engagement has taken place, and infrastructure work will start in September. Kāinga Ora is on track to deliver around 200 additional public homes in Hastings by June 2022."