The Classics Museum in the Hamilton suburb of Frankton has allowed people living in campervans to park on its land for $50 a week.
Owner Tom Andrews said for the first eight to 10 years he let people be there for free, later adding a small charge to try and dissuade masses of people from staying.
Many are elderly and on low incomes, with about 20 people staying in the carpark at the moment.
"Some of them are pensioners with no money, [and] have had to sell their houses [and] move into busses," Andrews said.
Under the classic car museum's resource consent, it is allowed three allocated parking spaces that can be provided for campervans. It also allows for overnight stays only for people visiting the museum, but these are confined to the three allocated areas.
Andrews said over the years the Hamilton City Council has turned a blind eye to a lot of the overstaying, but a new council employee came along and "laid down the regulations" to him two weeks ago.
The council disputes this, saying they have raised the compliance issue with Andrews a number of times, the first being in 2018.
"For a long time, staff have acted with kindness and patience towards resource consent breaches at the site," the council's planning guidance director, Grant Kettle, said.
However, Kettle said staff had received a complaint that raised a serious fire safety risk at the site, due to the number and proximity of the campervans allowed to stay.
"We have raised with the owner the breach of the resource consent conditions, which were brought to our attention as a result of investigating the fire safety risk."
Andrews said there was no fire safety issue as there is about 0.6ha (1.5 acres) of land for the campervans to space out, and rather that was a "red herring".
"If they want the campervans further apart, all they have to do is ask," Andrews said.
The council said its staff have provided Andrews with an option which could allow campervans too stay there under different conditions to the current resource consent. This would require a campground registration for the site and applying for a new resource consent.
"Council has not taken any formal enforcement action as a result of the breach of the resource conditions the site should operate under. No one is being forced out by the council," Kettle said.
He said staff had asked Andrews to let the council know which option he was intending to take within a couple of weeks of the initial meeting on June 25.
"Council has not heard from the owner about what their ongoing intentions are for the site. The owner, not council, has given the campers until 17 July to end any long-term stays in accordance with the consent conditions.
"Council is more than willing to work with the owner around the timeframes for when compliance is met."
However, Andrews said under the consent process it would be costly.
"Under that process they'd make me spend well in excess of $100,000 to make, what they consider, the site compliant with toilet blocks etc., which I am not prepared to do.
"We're obviously not getting revenue much from it, and really doing it as a service."
People staying at the carpark are all self-contained, he added.
