The government has spent $10.2 million and built 36 new state homes in Rotorua, with another 31 on the cards which is part of the city's ''post-Covid 19 economic recovery plan,'' the mayor says.
However, social agencies say more houses are needed to address the housing crisis.
Ministry of Housing and Urban Development place-based outcomes manager Caroline Reid said prior to Covid 19, the key issue was the demand for housing exceeded supply and those on low incomes were affected the most.
"Population growth has not been matched by supply of new housing. This has driven up house prices and rents across the board. But the most significant change in affordability has been in the lower end of the rental market, where the increase in rents has outstripped income growth.
"Increased demand for existing housing has meant housing has become less available for those on low incomes."
This has a direct effect on the Public Housing Register and reliance on motels, she said.
Meanwhile, the ministry was also working with Rotorua Lakes Council and Te Arawa to understand and respond to the housing issues affecting the city.
This partnership was instrumental in supporting a fast response to Covid 19 to ensure that rough sleepers were able to access safe, warm, and dry places to live in during the level 4 alert.
A key focus of the ongoing place-based assessment for Rotorua would be to support the council and Te Arawa in developing a Housing Strategy for Rotorua, she said.
"The work will focus on short, medium and long-term responses to current issues and future pressures. This work will be even more important now, in light of Covid 19 and the actions that will be needed to improve outcomes for people, for example providing for more transitional and public housing.
"Given the urgent need for new housing, the Ministry of Housing and Urban Development, Kāinga Ora – Homes and Communities, would continue to work with Rotorua Lakes District Council and Te Arawa together to identify land that is suitable for development as transitional and public housing."
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Kāinga Ora Rotorua and Tauranga area manager Sharlene Karena-Newman said its current work programme started in mid-2019 and the ministry would deliver up to 67 new homes.
"We were on target to deliver the homes by the end of July, however, this has clearly been affected by the lockdown. It is too early to be able to give new dates but what we can say is that we will be looking to accelerate works once the all-clear is given.
"We want to be getting our tenants into new homes as soon as possible."
About half of the houses had already been built and tenanted. They ranged in size between one and six bedrooms, she said.
Love Soup co-founder Elmer Peiffer estimated the city would need 200 to 300 houses if all aspects of homelessness like transitional, motel and emergency accommodation were considered.
"It has progressively got worse and worse."
The charity dealt with the homelessness on a daily basis before Covid 19 and Peiffer said that included people who were living in their cars.
"They are applying time and time again for a rental property and getting nowhere ... we are seeing this every day."
Louise Parry from the Salvation Army said it welcomed efforts to provide more social housing but some families were still struggling.
Finding affordable accommodation remained a challenge for many beneficiaries and low-income earners in the Bay of Plenty, she said prior to the Covid 19 pandemic.
"We see people living in overcrowded homes – often more than one family is forced to share a small house or unit. Some people resort to living in garages, and we have seen people living in cars."
Rotorua Mayor Steve Chadwick said the council has endorsed the need to continue with the Housing Plan as part of Rotorua's post-Covid 19 economic recovery plan.
"The place-based assessment announced by Government was a process that highlighted the very real need for housing as soon as recovery gets underway."
Housing was needed across the spectrum to increase rental and general housing stock, she said.
But the council had been clear that people who were assisted into housing "by those agencies and organisations doing this mahi also have all the support and wrap-around services that they need including mental health and addiction services".
"So there is a lot that needs to align. Many stakeholders will have roles to play in delivering solutions for our community – this needs a whole-of-community, whole-of-government approach."