Rotorua's mayor says the city is in the midst of a "humanitarian crisis" linked to a shortage of houses, demographic challenges and a struggling tourism sector.
Steve Chadwick spoke to other Bay of Plenty leaders in a regional mayoral forum when she revealed plans to deliver 3000 new homes within five years in a bid to help house the homeless.
Chadwick said Rotorua had experienced a "colossal rise" in house prices, making it nearly impossible for some people to afford their own homes.
REINZ figures show the average house price in Rotorua rose 24.8 per cent, from $521,000 to $650,000 in the year to September.
"When you get a nanny coming to a customer service centre who you know really well who says a $30-a-week increase in her rent means she can no longer stay in her house which is overcrowded anyway and I need to go into one of those motels ...
"These are our people," Chadwick said.
The impact of Covid-19 on tourism had exacerbated the situation, with people losing their homes "and on our streets". The pandemic meant 21 per cent of the local tourism workforce had been marginalised to weekend work, contract work or had lost their jobs.
"Tourism will return. It will dribble back but it will never be as it was before," Chadwick said.
The district was also increasingly populated by Māori and younger than the rest of New Zealand, with higher unemployment and benefit dependency, she said.
"We have a bit of a perfect storm. The demographics for us in Rotorua [mean] they aren't experienced yet by other areas to the same extent.
"That's put pressure on us, and on other agencies. It really requires a local solution."
The 2021-2031 Long-term Plan, approved in June, set out the 3000 homes target, and work on an inner-city plan aimed at encouraging investment and development in the CBD including residential development was under way.
Chadwick said the local housing register in 2015 had 23 applicants. By 2021, the number of applicants had grown to 741. Covid-19, high housing demand and local demographics "has really thrown a curveball to us".
"We are calling it a humanitarian crisis. We have 850 families now in motels. That is 280 units that they take up. That's no comfort for us at all. It shows the need for us to be building, building, building."
Chadwick said plans were in play with other agencies which have formed a task force focusing on the "political hot spots" of Fenton St, the CBD and Ngongotahā.
"Where do we start with the housing crisis? We are looking urgently to deliver 3000 homes over the next [five] years. Then 3000 more, then 4000 housing lots. This is an amazing inspiration and a target that Geoff [Williams, council chief executive] has actually put on to one of our deputy chief executives, Jean-Paul Gaston.
"You're hearing and reading in the media about the motels used for emergency housing. It gives me no comfort to have 850 families in there ... we've got to change the conversation with our community about a different form of housing modality that they're going to see in different parts of our district. That's quite a conversation we're having."
The task force consists of Rotorua Lakes Council, Ministry of Housing and Urban Development, Kaingā Ora, Ministry of Social Development, Te Puni Kokiri, police, and health and iwi entities.
Chadwick said the city's demographics showed the scene of a "crisis".
Kawerau mayor Malcolm Campbell said he was concerned by Chadwick's presentation, particularly the number of people living in Rotorua motels.
"It's quite terrifying knowing what's coming down the track at us. That's an issue."
Rotorua Budget Advisory manager Pakanui Tuhura told the Rotorua Daily Post the increase in the cost of housing has been a problem for a number of years and they worked hard with clients to ensure they could cover housing costs.
Tuhura applauded the council's plans to deliver more housing to Rotorua and said they should be focused on the areas and people most in need.
"We've always championed the view that housing has to be affordable and suitable. There's no sense in building a four- or five-bedroom house if our homeless are a couple or a small family. To me, what we need to be doing is revisiting who this housing stock is going to be built for," he said.
"The cost of housing across the country is actually probably the second largest issue in New Zealand at the moment. With Covid, of course, being number one."
A council spokeswoman said the organisation was continuing to work with developers to support the progression of housing development plans at Pukehangi and work was under way to potentially consider an intensification plan change.
"This would enable more housing, of different types, in suitable locations," she said.