The Government has been reviewing the future of emergency and transitional housing since June last year, with a paper detailing proposed changes likely to go to Cabinet in the middle of the year.
It comes as a second review, published on Thursday, warned that New Zealand may run out of motel rooms for the burgeoning population of people searching for emergency accommodation.
The earlier review is being carried out by the Ministry of Housing and Urban Development and the Ministry of Social Development. That review was never formally announced by ministers, but it has been mentioned in passing. The second review came from Deputy Prime Minister Grant Robertson's Implementation Unit, commissioned in August last year.
That Implementation Unit's review noted that since the Emergency Housing Special Needs Grant was established in 2016. It pays for the cost of temporary accommodation at places such as hostels and motels to meet people's immediate housing needs.
The Implementation Unit said that in 2016, "pressure in New Zealand's housing market has led to increased demand for all forms of housing assistance". This pressure was exacerbated by Covid-19. The Government spent $88.1m on Emergency Housing Special Needs Grants in 2019/19, this more than doubled to $215.4m in 2019/20, and increased by 50 per cent more to 338.5m in 2020/21.
It is expected to stay above $224.5m for the next four years, slowly falling each year.
The Implementation Unit said the system had coped well with strains that were never envisaged when the Emergency Housing Special Needs Grant was established in 2016.
However, it was concerned that in future, there may not be enough motel rooms for people who need them because motels will convert back to tourism when the border opens.
"Looking forward, the supply of emergency housing places suitable for EH-SNG [Emergency Housing Special Needs Grant] is forecast to decrease. This is because the resumption of international and domestic tourism in 2022 will make less commercial (motel) accommodation available," the review said.
"Demand for emergency housing will not necessarily decrease, resulting in greater pressure on the emergency and transitional housing, and homelessness systems," the review said.
National's housing spokeswoman Nicola Willis said "Emergency housing use has exploded under Labour.
"It's a disaster for our communities and for the thousands of families now raising their children in motel rooms".
She said the Government was "right to ask how it ever allowed things to get this bad.
"It's a shame it took this long though. National has consistently highlighted the problems with emergency housing, but Ministers have been in denial," she said.
Willis said the cost of living crisis had seen New Zealanders forced "out of the increasingly unaffordable private rental market, with the state house waiting list quadrupling to a record high of 25,887 families".
A possible area of reform is the increasingly blurred line between emergency and transitional housing. Emergency housing is a benefit, paid to fund "short-term last resort accommodation provided by commercial and community providers", while transitional housing is "short-term accommodation and tailored support services delivered … by accredited support providers".
The Implementation Unit found that nearly everyone from "clients" (people using the service), to the public, and the public agencies offering the service saw the two programmes "as increasingly similar initiatives despite one being a grant, and the other the delivery of a service".
The Unit found that the Government was on track when it came to delivering more transitional housing places, although the report noted that not all of these were new builds.
In the 2019/20 year. The Government delivered 1000 additional places and support services, although only 43 per cent were new builds.
In the 200/21 year the Government delivered 2000 additional places, of which 70 per cent were new builds.