The Government will take greater control over the use of Rotorua's motels for emergency housing in a $30million initiative that follows months of criticism.
However, Rotorua National MP Todd McClay says it is neither a plan nor a solution.
Housing minister Megan Woods announced yesterday the Government would take out direct long-term contracts with specific motels suitable for emergency housing.
The "mixed-use" of motels - taking both Ministry of Social Development clients and visitors - would end, ensuring separate accommodation for tourists.
Woods told the Rotorua Daily Post the plan would result in less emergency housing, but not fewer beds.
Two hundred families with children would be prioritised and grouped together in motels separate from other client cohorts.
Wrap-around social support services would also be provided, and a "housing hub" established in the coming weeks to help people access them.
And there is also a scope to allow longer-term motel stays - which currently breach the Rotorua Lakes Council district plan - with the council agreeing to efficiently process any applications for changes to consents to permit this.
The new arrangement would provide better pathways to permanent housing, and the Government was also addressing housing supply, long-term, with Kāinga Ora working to deliver around 190 additional public houses in Rotorua by 2024.
The decisions have come out of a month-long Government taskforce with the council and Te Arawa.
However, McClay said without a plan to end the use of motels for emergency housing, the Government was "institutionalising the problem".
"Those wrap-around services should have always been there, it's the government admitting there was a problem in these motels, even though for a long time they've been saying there isn't."
McClay said he was glad the Government was doing something to support those in motels but it was not enough for the city, which simply needed more houses.
"It really still says these people are likely to be in the motels for years to come, that's not a plan, that's not a solution."
In response, Woods said the emergency housing programme was not perfect.
"We are absolutely willing to acknowledge this has not been serving the people of Rotorua in the way that we wanted to.
"We heard, we listened and we acted. We're certainly not going to do what Todd's government did which was deny there was a crisis and not provide any solutions."
Woods said the Government was ensuring the people of Rotorua had somewhere to live.
"We don't want people who live in Rotorua sleeping in cars or on the streets, we have been committed to housing them."
Woods estimated moving to the new system, with the contracts and support services, would cost $30 million but said that included money already spent to place people in emergency housing.
She said it was an "urgent" issue for the city.
"If we look at the ratio of the emergency special needs housing grant to the number of transitional places in Rotorua, we see a ratio where for every five people there is only one transitional place and if you look around the country that's more like one to one."
Asked by NZME whether people from outside Rotorua would be able to get emergency housing in the city, she said: "The people in the motels do have a connection to Rotorua, by and large, there will, of course, be the odd exception."
"But the vast bulk of people are people who are from Rotorua or have a strong connection to Rotorua."
Housing and Urban Development (HUD), which would manage the contracts, and Kāinga Ora were assessing which of the current motels used for emergency housing have the facilities suitable for whānau.
Woods said four or five of the contracts would be in place next week.
"It means we have more ability to direct cohorts...we can make sure we have safer use of motels, both for the community and for the people living in them."
Rotorua Lakes councillor and Whānau Ora leader Merepeka Raukawa-Tait said proper checks and balances would be needed in the new system.
"I am thankful that mothers and children will be a priority in terms of appropriate placement.
"It has taken quite a bit of time and effort to get everyone committed to working together so now action must be taken."
Rotorua Moteliers Association chairman Mike Gallagher said he was a strong advocate for the end of mixed-use motels and was pleased with the announcement.
"If you chose to head down that business model then that should be your core focus. But if the motels are making money, they need to ensure their properties are aesthetically good.
"Moteliers are doing a good thing and it is helping them out financially, but it's always been a case of how can we do this better. There haven't been any formal guidelines in the past and it's about time we tidy things up as a whole community."
Rotorua mayor Steve Chadwick said the announcement was a great start at gaining control over the previously "ad hoc arrangement" with motels.
"I called for the Government to focus its attention on Rotorua and to have a presence here on the ground because of the untenable situation of mothers and children living in motels. That was the burning platform to get a priority focus for our district.
"These first steps are the building blocks to addressing the long-term housing pipeline challenges that we need to solve here in Rotorua."
Chadwick agreed motel accommodation was not the long-term solution for housing.
"We need safe, suitable homes for people, for whānau, and that is what we need to really focus on from here."
Māori Party MP Rawiri Waititi was approached for comment.