A tainted name and empty rooms - Ulster Street motels struggle after emergency housing

Friday, 9 May 2025

Following the end of large-scale emergency housing funding, moteliers on Hamilton’s Ulster Street are contending with a legacy of reputational damage, sharply reduced occupancy rates, and intense competition that has dragged room prices back nearly a decade.

Emergency housing grants, introduced in 2016 as a way to shelter the country’s most vulnerable on a short term or transitional basis, fundamentally reshaped Ulster Street.

Many motels were funded by the Ministry of Social Development (MSD) to house individuals and families displaced by the housing crisis.

According to MSD figures, between March 2024 and March 2025 the number of households in emergency housing across the region dropped from 510 to 126 - a reduction of 384 households.

Nationally, the drop was more stark - 2625 households fell to just 459, a reduction of 2166.

“We were more than pulling our weight, as far as looking after social housing throughout New Zealand,” said Waikato Motel Association president and Ulster Lodge Motel owner Narinder Sagoo.

Sagoo, a long-time operator on the street, says the departure of emergency housing has left the motel sector in an unusual position.

“The occupancy rate now is very low.

“At present, many motel rooms are coming back online, and there's an oversupply of accommodation.

“On one hand, the council is saying hotel groups will build more rooms because there's a demand. But in reality, a significant number of moteliers and motel rooms are already here - and they’re trying to sell a product based on projections that aren’t grounded.”

He added that while emergency housing filled rooms during Covid-19, it created a misleading impression of success.

“They were reporting statistics, but they were wrong for our industry because social housing was being equated with tourism. Now what's happening is the numbers are still being misrepresented - some of these motels aren't even tracking properly because they’re just getting their businesses back online.”

Several moteliers have invested heavily in refurbishment efforts to restore the appeal of their properties, some up to $25,000 per room, he said.

Despite these efforts, returning customers has not been easy. One operator, who asked not to be named, said their occupancy rates fell from about 80-90% in 2022-2023 to now just over 50%.

They said it was due to increased competition, state of economy and companies making budget cuts or restructuring.

As emergency housing took over many motels, others that remained outside the scheme saw a temporary boost.

“When they all take emergency housing, their customers come to us because they don't want to stay with the emergency housing (residents) together in one motel,” said the same operator.

But that advantage has since disappeared. “This year is not good as last year because the economy is not that good. So a lot of corporate companies, factories, they're closing down or restructuring.”

The rates for rooms have collapsed.

“We used to charge like up to $250 for a room in 2022-2023, now we are quoting $150 for the same room. Even that is too expensive because some other people are charging $100 to $120.

“The prices have gone backwards eight years. But our costs - council rates, insurance, rent - have gone up.”

The economic pressure was mounting and the motelier said they had to dip into their savings to keep the place running at times.

Meanwhile, theft, noise and perception issues linger.

“Emergency housing leaving the street has not had that big a difference because, for example, our table or chairs outside still get stolen. There's still a lot of people they just cross the fence and just take the furniture and run away.”

Mashiur Rahman, owner of Atrium on Ulster, said his occupancy rates are now between 50 and 60%.

“The demand hasn’t increased, in fact it has shrunk, whereas a lot more supply has come to the market. And they do offer a pretty cheap price. I don't think they're going to make any money, but it’s an attempt to attract customers.”

Even at a lower rate - studio rooms now fetch around $140 instead of the pre-pandemic $180. Attracting bookings is difficult.

Cherry Feng, who took over the Hamilton Settlers Motor Lodge in January, said the motel had suffered visibly before she and her husband began renovations. “The rooms looked terrible here before we take over, one of the rooms looked like it had a fire inside the room, we have heard of people fighting violently in here, and the housekeeper also said there was blood in these rooms.”

Feng and her husband repainted, recarpeted, and replaced furnishings across the 16-room site, spending about $15,000 on the improvements.

“We hope it goes back to normal and we can welcome tourists and corporate customers to our motel,” she said. But like others, they’ve fielded frequent calls from customers asking whether emergency housing clients are still being accommodated.

At Hygate Motel, receptionist Rian said they had managed three properties that all participated in emergency housing.

“Definitely it's a big change for us. We are getting all the rooms renovated and getting up to a standard again for guests and travellers… We have been busy for the last couple of months.

“Most of the corporate travellers when they call us, the first thing they ask, do you have emergency housing? So we had to tell them now we don't have emergency housing guests anymore.”

He estimated the motel spent over $100,000 on renovation, including dealing with high meth levels in some rooms.

Rian acknowledged the toll the programme took on staff and the brand.

“We had a very good rating and were always booked out before Covid-19, but after obviously taking on emergency housing, the ratings and the reviews have definitely gone down. We're trying to improve on that, but it's gonna take a while. It's just not going to change overnight.”

Despite verbal abuse and challenges from guests during the emergency housing phase, Rian said the street is beginning to improve.

“Since the start of emergency housing, the reputation of our street has definitely gone down, but I think things are changing now, which is good.”

According to MSD’s Tracey Smith, efforts are underway to continue reducing reliance on motels.

“At the end of 2024, the Government announced a trial in Hamilton and Wellington to support single people and couples without children into more stable housing, which aims to further reduce the reliance on motels for Emergency Housing.”

Of those who exited emergency housing in September 2024, 27% went on to receive an Accommodation Supplement, 29% entered a social housing tenancy, and 26% moved into transitional housing.