There has been a lot of criticism recently of moteliers making money out of the government’s current scheme to house homeless people in motels. It is quite clear that some moteliers have been doing rather well out of it, but I am not exactly sure why the media is blaming the motel operators. Like most businesses, they will charge as much for their services as they can get. They do have the argument – and it is a reasonable one – that, due to the quality of the tenants sent to them from MSD, they may have to do more repairs and refurbishments on their units than usual. It seems reasonable then to charge a higher rate than usual, although this should be offset by the fact that most MSD guests stay longer than average travellers, and so they ought to offer discounted rates for longer stays. This has not been happening.
Why is that the fault of the moteliers? Surely MSD have a responsibility to secure the best deal possible for the taxpayer in the negotiation for accommodation. We would all agree that we don’t want people living on the street, but the taxpayer must be protected from overspending on temporary accommodation for the homeless, wherever possible.
It seems not.
It’s a pattern repeating itself across Rotorua.
A motel receives an online reservation through a website like Expedia, and when the guest arrives they disclose that they’re a client of the Ministry of Social Development (MSD).
Wait. What? Homeless people make their own motel bookings through travel websites?
Many of the motels have made clear they do not want to host emergency housing clients, but feel they have no option to turn them away when they arrive via a third-party booking website.
If the motels do refuse the reservations on arrival, they face financial penalties from online booking giants such as Expedia.
You are kidding me! MSD pays retail rates for homeless clients, in spite of their ability to secure significant discounts, simply because of the number of guests that they provide. How does this serve taxpayers well?
You might expect that MSD would approach hotels and motels, ask them if they are happy to accept MSD clients, negotiate a preferential rate and then send along their clients. The motel operators then would know exactly what they are getting and can close themselves to other bookings, enjoy the extra income that this arrangement provides and be prepared to refurbish the motel units once the arrangement is over.
That sounds reasonable, but it is not what happens.
MSD seems to be concentrating most of these homeless people into certain areas, mainly Rotorua, Napier and central Wellington. The homeless people housed in these areas are not necessarily local. Thus, MSD policy takes homeless people away from their local area for no apparent reason, imposes them on motel operators who don’t necessarily want them and causes huge social problems for the residents in the areas where they are housed.
Why is this good policy? Who benefits from this? Putting large numbers of homeless people together causes huge problems. It may be bad enough for locals, but for some homeless people themselves living within the social strife, it must be a nightmare. Not all homeless people are drug addicts or gang members. Some are just victims of the housing shortage. Imagine what it is like for some of them.
Imagine also what it is like for tourists who book into one of these motels that also house MSD clients. This happened to me, after booking a motel on Booking.com. We arrived and straight away, things did not look good. The courtyard was full of people drugged out of their skulls. We checked in and immediately went to another motel that I had spotted on the way in. We took their last room. The proprietor said that they got most of their business from travellers who had booked but did not want to stay in the motel up the road. When we were leaving the next day, we were told that the police had been called to the other motel in the early hours of the morning. This incident happened in 2018. Things are much worse now.
I have no problem with homeless people being temporarily housed in motels, but this has to be done properly. This could be done quite easily if MSD staff negotiated with moteliers directly, instead of instructing homeless people to make their own accommodation bookings. Some motel operators will be happy to have MSD clients, and some will not. But once again, this is typical of a government that is big on talk but hopeless on delivery.
The waste of public money is scandalous. But you know what they say about socialists. Everything is fine but eventually, they run out of other people’s money. If this is not a good example of that, I don’t know what is.
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