Donna Blair, the general manager of Te Utuhina Manaakitanga Counselling Service which runs the facility, said a larger facility was needed because of the demand.
She said the number of beds meant facilities were available to those that needed them at short notice.
"Our organisation has been running for 30 years this year so it's a really big year for us. As a service we've got qualified and competent staff who work from a Te Ao Maori world-view as well as others."
He told the Rotorua Daily Post the opening was positive for Rotorua but also lined up with the Labour Government's priority to look after the health of New Zealanders.
"This ties into alcohol and drug addiction and comes under the banner of mental health," Coffey said.
"Keeping up with our mental health inquiry about what's going right and what's going wrong and what can we do to step in to fill that void as a government."
Coffey said the service helped "focus our ability as a community to wrap around and help" those in need.
The facility has been operational for about a year but the official opening has only just taken place to allow staff to settle into the facility.
Those who stay at the house have generally accessed a community alcohol and drug service, and been assessed as someone who would benefit from a residential programme.
Rotorua mayor Steve Chadwick also attended. She was on the Te Utuhina Manaakitanga board 22 years ago and said she was glad to see how far the service had come.
"At that stage we only had consulting room but we grew a service and to see it come to this today is just phenomenal," Chadwick said.
"To have our own inpatient unit that has a Maori kaupapa ... I know this model will be rich and that links with who we are, where we come from and cultural identity."
She said the unit was in a great location looking over the lake and sitting at the bottom of Mt Ngongotaha and it was an evolution in the right direction.