The government has signed two partnerships with Rotorua iwi Ngāti Whakaue which it says will ultimately see more than 1000 houses built.

The deal, the government says, will see $55 million go towards infrastructure upgrades, like roads and water, with most of the money going towards the main highway out of town to the east, where the bulk of the development is.

"This investment includes $35 million for improvements to State Highway 30 - expected to be completed by mid-2023," says Associate Housing Minister Peeni Henare.

"The improvements, through to Wharenui Road, will address key transport constraints to future stages of Ngāti Whakaue Tribal Lands Wharenui Rise development.

"A further $20 million was committed to Rotorua Lakes Council for other enabling infrastructure for Wharenui Rise. This included $5 million for local roading improvements and $15 million for sewerage and stormwater infrastructure."

Ngāti Whakaue kaumātua Monty Morrison says it's a great first start at addressing the housing crisis in Rotorua with a mix of public and affordable housing to be built in the city's east.

"Partnerships are pretty important. I think that's one thing that Covid taught us is that people need to work together to overcome some of the great challenges we've had. So great news that people have been able to work together, and we need to continue to do that."

The partnership is important because iwi can't make changes alone when it comes to housing in Rotorua, says Morrison.

"While it's taken a while to get here, we are here and I think now that we have the ability to work together and we have the understandings and relationships, I think we can work better at pace,."

There were particular needs within the geothermal area, he says.

"If we're going to develop more then obviously, there needs to be this space process where funding is made available, land's obviously made available. So there's lots of things to do. And this is just one part of their process."

-Ashleigh McCaull/RNZ.