Labour's local MP in Rotorua is keeping positive about efforts to turn around the city's dire housing situation.

Kainga Ora has paid $8.1 million to buy the Boulevard Motel on Fenton Street and two-thirds of a hectare of land in the town.

It plans to turn the motel into temporary accommodation for 80 people and then build houses on the land.

Waiariki MP Tamati Coffey told Heather du Plessis-Allan it's a myth that Rotorua's harbouring the nation's homeless.

"How terrible that we've inherited this housing crisis and how great that we're looking at innovative solutions to be able to tackle all parts of the housing spectrum."

Labour also plans to build more houses on the land.

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