Kāinga Ora won't confirm if it is buying a second motel for transitional housing in Rotorua after MP Tamati Coffey said another purchase was in the works.
The agency said this week it had paid $8.1 million for Fenton St's Boulevard Motel, which would provide transitional housing for up to 80 people across 30 rooms.
Coffey, a Rotorua-based Labour MP, told Newstalk ZB on Thursday he understood there was "another one on the way" but he did not know which motel.
In a written statement responding to Rotorua Daily Post Weekend questions, Kāinga Ora Bay of Plenty regional director Darren Toy did not confirm or deny another purchase.
"We continue with urgency to actively explore a wide range of options around increasing housing supply in Rotorua.
"This includes the purchase of land and existing properties, partnering with other landowners including iwi and hapu, redevelopment of our own existing properties, and leasing options," he said.
Toy said more information about the plans would be provided when possible, as happened with the Boulevard Motel purchase.
Coffey told the Rotorua Daily Post he and others in the community believed there was a need for a second Government-owned motel given the high demand for accommodation options and long housing waitlist in Rotorua.
He said it was a "necessary" solution to an "unfortunate" situation and there would still be plenty of accommodation for tourists left over.
Rotorua MP Todd McClay said the purchase of motels was "changing Rotorua from a tourist town to a homeless town".
"This is a failure of policy. Everywhere else is building houses but in Rotorua, the government has decided not to build houses but buy motels," the National MP said.
McClay said he had fielded many inquiries from residents concerned about the motel purchase.
"People are disillusioned and angry. We've been calling for the government to do its job, all they are doing is throwing money at the problem and moving people from motel to motel."
The $8.1m price for Boulevard Motel's 30 rooms worked out to $270,000 per room, he said.
"Someone can build a house for that surely."
Local agents also queried the price - double the CV for the property - but Kāinga Ora has said the price was in line with an independent market valuation.
Act Party leader David Seymour said the Government needed to show it was not paying an "inflated" rate if it bought another motel.
"Buying motels won't solve the housing crisis. We need long-term, sustainable solutions."
Coffey said the idea of paying a CV rate in Rotorua's "hot housing market" was wrong, especially for property in the inner-city.
Buying motels was a "really good investment for the taxpayer", he said.
"The alternative is the money just goes on a one-way track to motel owners. Anybody that can do a bit of basic maths will realise that this investment ... is a real benefit to the taxpayer."
In a housing crisis, the Government should be " pulling every lever we have", he said.
Rotorua mayor Steve Chadwick said buying motels was not a long-term option, in her view.
"In the medium term, we need more transitional housing so that people aren't in emergency accommodation long-term and that is what Kāinga Ora is working on.
"Converting what used to be a motel into housing is just one part of that – as they've said, they are also working on building more houses."
The Rotorua Daily Post reported recently that since July 2018, the agency has built 73 houses, bought eight and demolished 22 in the city. It has also recently purchased a 2ha plot on the corner of Ranolf St and Malfroy Rd with plans to build medium-density public housing.
Chadwick said more houses was the ultimate goal, but this couldn't happen overnight.
"We need a variety of solutions in the meantime and solutions is what we've all got to be focussed on.
"Any potential for reputational damage is, of course, a concern and addressing perception issues is part of ongoing Rotorua marketing campaigns."
Destination Rotorua head of marketing and insights Jo Holmes said monitoring indicated there had been plenty of accommodation rooms to go around in the "busier than usual" school holidays.
Residents have their say
Rotorua residents and visitors say the ongoing use of motels for transitional housing is not sustainable.
It was the view of resident Jamal Houha.
"[It] spoils the very image of what Rotorua used to be which was a nice tourist place that everyone around the world and out of town came to," he said.
"If we have any kind of event or people on holiday where are they going to stay? They can't book a motel cause the homeless are staying in it.
"Why buy motels when you can get a section to put flats on or maybe build a big facility outside of Rotorua on some rural piece of land."
A woman living in a transitional housing motel with her husband and daughter said she believed Māori land shareholders could find an answer.
She would not be named due to her living situation.
"My initiative is they look into their empty lots and propose a tender to the Government for housing to be built on the land."
She said the tender would have procedures and policies in place with responsibilities for landowners and renters.
"This way we can give our people back their own land and shareholders can earn a small percentage fee."
Catherine Rawnsley visits her family in Rotorua regularly. She had noticed a "huge change" in the town and believe it was due to motels being used for transitional housing.
"A lot of people I speak to are put off to visit Rotorua for a holiday due to the crime and the motels in Fenton St starting to look like slums.
"It's hardly appropriate for the tourist gem of the North Island."
Other residents the Rotorua Daily Post spoke to said purchasing motels was not money well spent and would impact on young children forced to grow up inside.
- Additional reporting Samantha Motion