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More than 30 cabins owned by the Queenstown Lakes District Council are sitting empty, despite the region facing a rental housing crisis.
The revelation has angered local housing advocates, who say people are living in horrendous situations - some camping out in tents and cars for the winter.
There are about 45 cabins on the council-owned Lynch Block site, but only some of them are being rented out.
"We've been speaking to council for a long time about what they have available and they've never mentioned the situation with the cabins," Queenstown Housing Initiative co-founder Hannah Sullivan told the Mountain Scene
''They laugh the problem off in their warm offices and say it's nothing to do with them, when they are sitting on this information. 'How can we trust they're doing everything in their power to help?''
Queenstown Mayor Glyn Lewers blamed the cost of getting the properties up to the government's Healthy Homes standards.
"We've done 13 of them and that was $370,000," he told Checkpoint on Thursday.
"Those were the easiest ones, but the ones that are still to be looked at, they're probably leaning more towards demolition because they are at a point where they're at their end of life. The cost becomes quite prohibitive on some of them."
Even if the council had the funds, Lewers said there were not enough builders in the region to get them done in a timely manner.
Queenstown Lakes District Mayor Glyn Lewers Photo: Supplied
"You can't just rustle up contractors to do all 45 at once. It takes some time. They're in such a state that they take some time to get up to scratch."
In March, dozens showed up to a protest demanding action on housing in the tourism-dependent city. Deputy Mayor Quentin Smith said they had the highest property prices in the country and very high demand for short-term tourist accommodation, combined with a relatively low wage economy centred on tourism.
"It creates a bit of a perfect storm - the low wages, high [priced] rentals and low availability," he told Morning Report.
Sullivan told RNZ in May landlords were taking advantage of the shortage, hiking prices and renting out mouldy houses with leaks and even holes in the ceilings.
Lewers described the empty Lynch Block properties as "pretty rudimentary", but even if they were a better option that sleeping in cars or on the street, he said after decades of "non-maintenance" he would not let anyone stay in them.
"It is frustrating as anything that we have people that are living in cars and tents. But I can't instruct my council to let these out. Because one, it's unlawful, and two, I've had people show me other rentals in such horrible state I'm not gonna direct my council to be a landlord letting out houses that aren't up to scratch."
There was a Queenstown Lakes Community Housing Trust plan to put 150 apartments on the site with 232 beds, but Lewers said no decision whether to give the go-ahead would come soon.
"The Lynch block that they're on is quite a substantial piece of valuable land in the CBD. When that was subdivided off and held by council, we decided the resolution of council at the time was to look into affordable housing, but that decision has not been confirmed, and that is a decision for a later date for council…
"I think we've got the long-term plan next year. That would probably be the best time to look into it."