Some Rotorua motels say they aren't interested in running emergency housing anymore because it's not worth the drama and want to focus their efforts on looking after tourists.
Government agencies are in the process of shoulder tapping motels to run their new emergency housing system in Rotorua.
The changes were announced last month and are aimed to improve safety for not only those staying in them but people living nearby.
Part of the changes will see the Government directly contract motels in Rotorua and wraparound services will be at every motel. Women and children will be housed together separately.
Currently, individuals can seek their own supplier and provide quotes to the Ministry of Social Development which pays the motel direct.
The Ministry of Urban Development has confirmed to the Rotorua Daily Post it has so far talked to more than 30 moteliers who were keen to be contracted.
The ministry said it aimed to have the contracts underway with more than 200 families housed by the end of June.
However, despite the lure of high and regular incomes, some moteliers are still saying
Coachman Spa Motel Rotorua manager Shruti Shah said they used to have all rooms booked out with emergency housing clients, but they were slowly pulling out of the market and aimed to have no more within the coming weeks.
Shruti said the money wasn't worth the "drama and damage" that was caused to the motel.
She said they had stopped all the difficult clients and had five remaining emergency housing tenants who were seeing out their final weeks.
"We have lots of visitors who ask us all the time if we have WINZ people staying here and they don't want to stay if we do. They are coming here to relax and don't want the drama and bullies."
Shah said they were confident tourism and business would pick up and they wanted to focus all their efforts on looking after New Zealanders and those from overseas when the borders opened.
Asure Palm Court Rotorua lease owner Mike Raynes, whose motel is on Fenton St, said he had owned the business for nearly four years and business was "booming".
He said he had never taken any emergency housing clients and never would but said he could understand why, mainly overseas investors, were going down that path.
"Some of them are tripling their returns. If I was younger, I would do it, put a manager in and make some good coin."
However, he said they were happy doing what they were doing and thanks to the other motels that had taken on emergency housing, his business was doing great with domestic visitors and corporate clients.
He was also well situated to avoid "drama" being between Emerald Spa and Tuscany Villas, which he said was well run by Visions of a Helping Hand with 24-hour security. On the other side, he had Arista of Rotorua and Capri on Fenton which had contracts to house New Zealand Defence Force workers.
He said Asure Palm Court Rotorua had no vacancies every weekend despite it being winter, Queen's Birthday weekend had been sold out for more than two months and Labour weekend in October was already sold out. He said there was also good occupancy during the week with corporate clients.
"It's a bloody good business time at the moment and forward projections are looking great. Once the bubble opens up, it will be booming."
Another Fenton St Motel manager, who spoke on the condition of anonymity, said they hadn't offered emergency housing since May last year after a nasty fight following a drug deal that went wrong.
She said the incident was so frightening, they immediately stopped housing emergency housing clients.
She said it was hard to make a living especially with cost increases such as rates and minimum wage, but it was better than dealing with the police constantly and being afraid of the people staying there.
"It's really hard for us to be honest but if the country is suffering and we go into level 4 lockdown again we will have to go back to emergency housing," the motel's manager said.
The Rotorua Daily Post approached people living in a Fenton St motel who had been homeless for several months about what they thought of the Government's plan to change emergency housing in Rotorua.
None wanted to be named but said they were concerned they were going to be "over regulated" and told where to go, instead of having the choice as they currently did.
One woman, who said she was classified as "a single", said she was fighting through the courts to get her children back and it would be detrimental to her to be put somewhere not ideal for children.
Another said it was a nice idea, in theory, to keep gang members away from women and children, but it would be a nightmare to manage.
"We can't help who our family and partners are."
Ministry of Urban Development engagement and communications manager Dennis de Reus said good progress was being made by the multi-agency taskforce that was tasked with getting the new process up and running.
"Working together with the Ministry of Social Development, we've started talking with motels about contracts for emergency housing.
"We're still engaging with moteliers, but already we're confident there will be enough motels and motel places to meet the needs of families we're looking to support through these contracted arrangements."
When asked how many motels they would contract he said it was yet to be determined because it would depend on the configuration of individual motels.
He said the initial focus was on motels that had amenities and facilities suitable for longer-term stays for families and children.
"So far we've spoken with more than 30 motels and a number have expressed an interest in contracting with HUD and these negotiations are under way."
He said the ministry was aiming to have places for about 200 families by the end of June.
When asked if the ministry would ensure there was still a good standard of motels for visitors to Rotorua, de Reus said contracting with motels exclusively for emergency housing would ensure there was suitable accommodation for domestic and international visitors.
He said so far four social service providers had indicated their interest in providing wraparound support services and the ministry was aiming to have those contracts confirmed by the middle of June.
"We'll be in a position to provide more details about the support services and the number of places we've contracted by the end of the month."
The Rotorua Daily Post asked the Ministry of Social Development where the proposed new Housing Hub would be and when it would be set up.
In response, ministry housing general manager Karen Hocking said it was too soon to say when and where it would be but it would be up and running "in the coming months".
Rotorua Motel Association chairman Mike Gallagher said the Government's move was overdue and it would be good to have motels specifically for emergency housing.
He said the association had become the "apologist for Rotorua", answering emails from people who had had a bad experience.
"They would say things like I've been coming to Rotorua for 14 years and I don't like to complain but this is what I've observed ... People reach out but we tell them next time we will make sure you find a nice place to stay so you can have a true Rotorua experience."
He said they had set up the Rotorua Tourist Attractions website which included a list of all non-emergency housing motels, which was a timely move and something that was needed in the market.
What about district plan issues?
The Rotorua Daily Post sought to clarify from the Rotorua Lakes Council how the new way of running emergency housing will work under the district plan.
The Rotorua Daily Post publicly revealed last month that much of the city's emergency housing was breaching the district plan as most motels were in a commercial zone that could only have people staying on a non-temporary basis.
Under the district plan, the zone allows temporary tourist accommodation by paying guests for no more than 28 days.
Many of the emergency housing clients are staying in the motels for longer periods.
The Rotorua Daily Post asked if the council would change something to allow the new contracted motels to operate lawfully.
In response, a council spokesman said: "Council won't be changing any current processes which means no change to the district plan. As contracted facilities are confirmed, council will assess what, if any, consent changes are required and will help to make that process as efficient as possible for all involved."
The changes to emergency housing:
• Government to directly contract motels for emergency accommodation
• Wraparound social support services for those in emergency accommodation to be provided
• Grouping of cohorts like families and children in particular motels separate from other groups
• One-stop Housing Hub for access to services and support to be established