Housing New Zealand confirmed the property belonged to the state and regional manager Peter McKenna said the organisation was working with the police to establish what happened.
Mr McKenna said Housing NZ did not tolerate tenants using their premises for criminal acts and would evict and charge tenants where evidence of this type of activity was found.
He said the corporation had won a test case seeking more than $180,000 from tenants who manufactured methamphetamine in a Napier state house.
The house was so badly contaminated that it had to be demolished in 2004.
"We charge tenants for any damages they are responsible for," he said. "Where payment is not made voluntarily the corporation seeks to recover costs through the courts. Tenancy managers are trained to spot signs of methamphetamine use and P-labs are identified through routine inspections and by police."
The Herald understands the accused man was sharing the property with his mother and her nephew.
Mr McKenna said it was too early to say if the house needed decontaminating and how much this would cost but said tests could be carried out.
Between 2006 and 2011, 26 Housing New Zealand properties tested positive for methamphetamine costing more than $500,000 in testing, decontamination, repair and in some cases demolishing and rebuilding houses.
"Given that the corporation manages over 69,000 properties, this is only a very small number that have been found to be used for methamphetamine production," said Mr McKenna.