Woods was a member of the Progressive Party from 1999 to 2007 and was involved in several of Jim Anderton's re-election campaigns. She contested the Christchurch Central electorate in the 2005 general election and came fourth, receiving 1077 votes. She was placed fourth on the Progressive party list. As the party obtained only 1.2% of the party vote, she did not enter Parliament that year. She was a member of the Spreydon-Heathcote community board in Christchurch from 2004 to 2007. Woods joined the Labour Party in 2007. In the same year, she contested the Christchurch mayoralty for the centre-left Christchurch 2021 group, receiving 32,821 votes and coming second against Bob Parker, but beating Jo Giles in the election contested by ten candidates. She did not contest the 2008 general election or the 2010 mayoral election. Woods was selected as the Labour candidate for the 2011 election in the Wigram electorate. She succeeded Jim Anderton, who had announced that he would retire either after winning the Christchurch mayoralty or at the end of the term of the 49th Parliament in November 2011. Woods was a key member of Anderton's campaign committee, along with key Progressive Party members like Jeanette Lawrence and Liz Maunsell, and Labour activists such as campaign manager Tony Milne, Ben Ross and Liana Foster. Until the 2010 Canterbury earthquake, Anderton was leading in the opinion polls, and winning the mayoralty would have caused a by-election in the Wigram electorate. The earthquake resulted in a mood swing in Christchurch, and Anderton lost against Bob Parker. Anderton remained an MP until the end of the term of the 49th Parliament, and Woods won in the 2011 general election in the Wigram electorate.
Member of Parliament
Woods' candidacy, which began in late 2010, was centred on job creation in her electorate. She stated in her Labour selection speech that "Growing up here in the 1980s, I watched people lose their jobs. I saw workplaces like the Addington Workshops shut their doors forever. Now I am 36 years old and am watching jobs disappear from our communities again." Woods also cited the rising cost of living for everyday people as a major concern. At the election, Woods won the seat with 45.11% of the vote and a majority of 1,500 votes. Woods won re-election in the with an increased majority. Woods was previously Labour Party's spokesperson for the Environment and Climate Change and has served prior as the Party's spokesperson for Tertiary Education and associate spokesperson for Science and Innovation. Woods was elected as a Cabinet Minister by the Labour Party caucus following Labour's formation of a coalition government with New Zealand First and the Greens. As of 2018, Woods is the Minister of Energy and Resources. On 12 April, Woods announced that the Government would halt future gas and oil exploration but clarified that the existing 22 contracts would be allowed to continue. On 27 June 2019, in Prime Minister Jacinda Ardern's first major reshuffle of the coalition government, Woods was appointed Minister of Housing, replacing Phil Twyford. On 19 June 2020, Woods was given joint responsibility with Air CommodoreDarryn Webb for overseeing isolation and quarantine facilities for travellers entering New Zealand, as part of the government's response to the COVID-19 pandemic.