Kāinga Ora is being asked to explain why a deranged tenant who has repeatedly threatened to kill a terrified family and burn down their house has been allowed to remain in her state home.
"It's a horrible story," National's housing spokesman Chris Bishop said after the Herald reported that a Rotorua family are sleeping together in their lounge and their children receiving therapy following months of abusive, threatening behaviour from the woman next door.
"I think everyone reading it would have put themselves in the position of the family and been pretty appalled."
The children's mother has been fighting for over a year for police and Kāinga Ora to take action against the tenant and her gang member partner.
And despite the neighbour threatening to kill the mother with a shotgun and have her and another woman on the street raped, the mother says Kāinga Ora has refused to move the tenant on or take action to protect her family.
Instead, a tenancy manager told the mother to file a police complaint if she felt unsafe and apply for emergency housing with the Ministry of Social Development.
Bishop said the case, though horrific, was not an isolated one due to a "sustaining tenancies" policy that has seen just three Kainga Ora tenants evicted since Labour came to power in 2017.
"Sadly this is a story we're seeing repeated around the country. It begs the question here of why does Kāinga Ora not take action in these circumstances?"
Bishop said there was a waiting list of 25,000 people who were desperate for a state home but weren't able to get one.
"Why do people who terrorise their neighbours get to stay?"
Rotorua mayor Steve Chadwick said she was not aware of the details but the situation appeared to be challenging.
"We want everyone in Rotorua to feel safe and in situations like these it is my expectation that the relevant government agencies and ministers are working together to find a satisfactory resolution and that this is being done with some urgency."
The family estimate they have called police about the woman's erratic behaviour at least 60 times during their 14-month tenancy, resulting in numerous police callouts, and repeatedly complained to Kāinga Ora for help.
In the most recent and disturbing incident, the mother found her children "uncontrollably shaking with fear and crying" after a psychotic episode in the middle of the night culminated in the neighbour yelling, "I'm gonna f*****g murder you".
"That's right, we got a shotgun, and we ain't afraid to use it," the woman screamed as the family cowered inside.
"You don't know who my baby daddy is, don't f*** with me ... you're gonna die ... b**** f*****g nark b****."
The family fear the woman could have access to firearms through her patched gang member partner. The two terrified young children are now sleeping with their parents in a tent in their lounge and receiving weekly therapy sessions from a child psychologist.
Associate Housing Minister Poto Williams said everyone deserved to feel safe in their home.
Kāinga Ora was working closely with mental health and social service support providers in this case, as well as police, to address the "underlying issues".
She acknowledged this had been a very difficult time for affected neighbours.
"Kāinga Ora has visited and contacted the tenant several times in the past weeks, encouraging them to get specialist care and support.
"They are also currently exploring other housing options which may provide a more suitable home for them to live in.
"It is my expectation that Kāinga Ora continues to work with other agencies to resolve the situation."
The Herald asked Williams whether it was right for the tenant to keep her taxpayer-funded home while the family were too scared to sleep in their bedrooms and the children needed counselling due to the ongoing abuse.
She did not respond directly, but said the agency had strengthened its policy this year to deal with challenging tenants.
"As minister, it is my expectation that these changes are enacted and that different housing options which may better serve a tenant's needs, are found.
"My office has been briefed on the steps Kāinga Ora is taking to find a solution for the situation in Rotorua."
Meanwhile, an employment and tenancy advocate has offered to work with the family after reading of their "awful situation".
Cassey Bliss said she could assist the family through any potential Tenancy Tribunal case or Human Rights Review Tribunal proceedings should they arise.
"It's clear their right to quiet enjoyment has been breached, what's not really clear is who should take responsibility."
Kāinga Ora Bay of Plenty regional director Darren Toy said the agency was working with a raft of agencies to provide the tenant with support and find a resolution.