The Maori Party wants iwi to get the first right of refusal for all state houses the Government plans to sell.
The Government was planning to sell up to 2000 state houses to private social housing providers within a year, and more sales after that were likely.
Prime Minister John Key outlined the plans for social housing in Aotearoa at his state-of-the nation speech in Auckland yesterday.
The Maori Party described the plan as a mixed bag that fell short.
Co-leader Marama Fox said although the party objected to the sale of Government assets, she believed iwi should have the first say on where they were going.
"If the Government are going to go ahead and do that then we think iwi should have first right of refusal, many iwi have already settled if those houses and the land they are on had been included in a redress package Maori could have been moving in this space already.
"Now that they have come up and are available - we would expect that iwi would be involved and be able to move into the social housing space."
One of those was Auckland's largest hapu, the Ngati Whatua Orakei Trust, which was currently building an urban papakainga for its descendants.
It also owned more than 100 houses which it had leased to Housing New Zealand since 1996.
But from June the trust would take back those leases and manage the houses and tenants.
Trust deputy chair Ngarimu Blair said it wanted to expand the sub-tribe's role in housing and said the call for first right of refusal for the sale of state homes, would have been perfect.
He said it tried to negotiate that in their settlement, but it was unsuccessful - however Mr Blair says it was always willing to sit down and talk with the Government about what was possible.
In the coming months, the Government would start national engagement, which would include speaking with iwi, followed by more specific consultation in areas where state-house transfers are possible.