A homeless shelter founder says tackling addiction is the first step to getting people off the streets.

The Government has promised $200 million for the Housing First programme over the next four years, which will help put roofs over the heads of a thousand rough sleepers.

Tiny Deane from Visions of a Helping Hand, told Mike Hosking the money won't just be spent on the brick and mortar - but also the wraparound social services.

"What I have seen the most, and what we deal with down here in Rotorua...it's the addiction and [people] putting themselves first over the children."

He said addiction plays a huge part in homelessness and needs to be dealt with as a part of rehabilitating people.

Deane said their central city shelter houses 187 "chronic rough sleepers", all of whom struggle with drug and alcohol problems.

"For them, it's just drug and alcohol purely."

"A roof over their head is important, we provide that through the night shelter," Deane said.

However, he said it's just the start.

"It's about getting in the top two inches of their head first, with psychiatrists, psychologists, counsellors, social workers, because the top two inches is the only thing that's going to change their mind on getting back to normal and running a household."

Deane said they have had incredible success stories of women turning their lives around and getting their children back from Oranga Tamariki.