The government is putting $12.35 million into three papakāinga projects between Rotorua and Taupō.
It will see 27 rental homes built in a papakāinga development scheme in the rural community of Reporoa, within the rohe of Ngāti Tahu - Ngāti Whaoa.
Māori Development Minister Willie Jackson said the project will bring whānau back to their tūrangawaewae and reinvigorate the Waimahana Marae.
"I congratulate the whānau for reaching this important milestone in their housing journey. I know the vision behind this papakāinga is to ensure intergenerational living thrives, where whānau are living in warm, safe and affordable homes," Jackson said in a statement.
The site was blessed and the first sod turned this morning.
Jackson also unveiled a plaque dedicated to the tamariki who died in the Spanish Flu pandemic in 1918.
"This loss is a sad reality for many Māori communities and a reminder to all of us about the importance of protecting our whānau and whakapapa during the COVID pandemic," Jackson said.