Hamilton-based Te Runanga o Kirikiriroa says it must sell most of the 62 houses it plans to build, otherwise it won't be able to continue developing more for people in need.
The organisation is a registered social housing provider, which means eligible tenants pay no more than 25 percent of their income on rent.
It is due to hold a ceremony tomorrow, marking the turning of the sod at the site of the whare in the suburb of Enderley.
The runanga has already built more than a dozen homes for kaumatua and is now branching out to provide homes for people it describes as the working poor people who cannot afford a whare, including tangata whenua.
Chief executive Mere Balzer told Te Manu Korihi that, initially when it began developing social housing projects, it would provide a third of homes for rent, pre-sell the same number of whare, and a third would be available for rent to purchase or shared equity.
However, that approach had changed. After reviewing its finances, Ms Balzer said if the runanga continued with a third model it could manage but would not be able to develop any future initiative as it would not be breaking even for a while.
Ms Balzer said the runanga is looking at building a range of homes with two to four bedrooms, and on request some with up to six bedrooms. Kaumatua are helping it choose who should live in them.
Te Rau Awaawa organise for elders to meet with potential tenants and interview them. The runanga own the houses and Te Rau Awaawa looks after the people who go in to the whare.