Most of the people staying at a controversial hotel used for high-needs homeless on Rotorua's Fenton St have been moved to other housing.

Twenty-eight of the 41 people who were staying at the Four Canoes Hotel have been moved, the Ministry of Housing and Urban Development has confirmed.

The ministry is still looking to house 13 people remaining at the hotel to somewhere more suitable to their needs, it said in response to questions.

Some of those living at Four Canoes Hotel have high-needs drug addictions and mental health issues and have been cared for by wrap-around support agencies.

The Rotorua Daily Post has previously reported locals' concerns that having such high-needs people living in a hotel in the centre of Rotorua was not a good idea.

The hotel has been contracted by the Government since March 2020 when New Zealand was plunged into lockdown during the Covid-19 pandemic.

Homeless people sleeping rough were put into the hotel under the Covid-19 response so they could isolate. Despite there no longer being lockdowns, the Government has committed to ensuring people would not need to return to homelessness and is funding the accommodation until longer-term options are found.

The Rotorua Lakes Council issued the hotel with a Dangerous Building Notice and a Notice To Fix on August 8 following concerns about the hotel's conditions from new on-site contractor Lifewise.

The social service provider took over a service contract in July and immediately spoke out about its health and safety concerns, and removed its staff from working at the site.

The ministry said it did not consider the hotel unsafe for people to be living there and said the building owner had been working with the council to fix the issues.

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The Four Canoes Hotel, along with all other motels in Rotorua offering emergency housing, does not have proper resource consent to operate as housing and only has consent for short-term visitor accommodation.

The Government has lodged resource consent applications for 13 of its contracted motels with the aim of operating emergency housing for up to the next five years. Most of the public submissions are against the applications and hearings will be held this month.

Ministry partnerships and performance general manager Will Barris said those who moved had gone to other housing providers, including entering the Housing First programme, and returning to live with whānau and other supported housing. He would not give specifics.

The Rotorua Daily Post Weekend asked if there was an internal investigation under way into the state of the hotel and its appropriateness since March 2020. It also asked if it acknowledged the hotel was not appropriate.

In response, Barris said the safety and welfare of clients were paramount.

"[The ministry] monitors contracted accommodation facilities on an ongoing basis and when problems are identified we work with the provider to resolve these and that is what has been occurring."

In response to whether there was an internal investigation, Barris said: "The building owner has responded to the council and is awaiting their response."

In response to questions, Barris said the ministry had contracted the Four Canoes until June 20, 2023, but could terminate the contract with 30 days' notice.

He would not release how much the Government was paying for the contract for reasons of commercial sensitivity.

Rotorua Lifewise regional manager Tepora Apirana said the organisation still worked with people living at the Four Canoes Hotel but had significantly reduced the number of people supported.

"Comprehensive assessment, triage, appropriate planning and skilled workforce has enabled Lifewise staff to support effectively and engage with people at Four Canoes."

She said Lifewise continued to urge the Government, local government and agencies to provide alternative solutions to emergency housing and fund suitable sustainable supported living options.

"Emergency housing in motels is not a suitable housing option," Apirana said.

"Lifewise is working in partnership with other providers and Government agencies to find an alternative appropriate site to Four Canoes, however this is challenging with delayed support from agency partners."

Apirana said Lifewise wanted to see an end to emergency housing, which was why it spoke out about the conditions at Four Canoes Hotel.

Council district development deputy chief executive Jean Paul Gaston said the Dangerous Building Notice requires remedial action to be completed by November 3 and the Notice to Fix required action to be taken by September 26.

"We continue to work with the building owner and agencies to address the issues outlined in both notices."

When asked what happened if concerns weren't fixed within a specified time period, Gaston said an infringement notice might be incurred and a notice might be reissued.

When asked if the Four Canoes Hotel was safe for people to be living there, Gaston said: "The physical building itself is safe for its intended use, as a hotel. However, the facility was being used for those with high-care requirements, which introduces higher building standard requirements. On this basis, the Dangerous Building Notice and Notice to Fix were issued. We're currently reviewing the situation."