National says it would aim to end the use of emergency housing motels in Rotorua within two years, if elected.
It forms part of a social housing policy released by the party on Saturday. It plans to increase the number of social housing places funded by government, as well as providing more capital to Community Housing Providers to compete with Kāinga Ora.
National said the emergency housing policy had become an economic and social disaster, with the government spending nearly $1 million every day. National has corrected this figure from every week which was stated in its first media release on the subject.
The Labour government had committed to progressively reduce the use of motels used for emergency housing in Rotorua to "near zero," through an accord with Rotorua Lakes Council, Te Arawa and Ngāti Whakaue.
But Rotorua MP Todd McClay said Labour had ignored the negative effects its housing policy was having on the city's residents, and its tourism reputation.
"They've given up on what is one of New Zealand's premier tourist destinations and given up on the people of Rotorua who just want their city back," he said.
National said it would establish a priority one category on the Social Housing Register for families who have been in emergency housing motels or sleeping in cars for longer than 12 weeks, putting them at the front of the queue for social housing.
It would also tighten the eligibility criteria for emergency motels, and require families receiving emergency housing grants to use them in the area they were currently living in, rather than moving to a different area, such as Rotorua.
National's housing spokesperson Chris Bishop said the party would also reform Kāinga Ora, calling it a "giant bureaucratic monolithic monopoly".
It would introduce consultation requirements for new developments and give Kāinga Ora more power to evict unruly tenants.
Using the Social Investment Fund the party plans to introduce, National would also establish a social impact bond, funded at $50 million over three years. The bond would work as a contract between government and providers to shift families out of emergency housing into secure homes in the short term, and keep them there in the long term.
Along with the Greens and Labour, National also recently committed to building at least 1000 social houses a year in Auckland.