A temporary housing village could be set up in Edgecumbe to take in people whose homes have been seriously damaged by the recent floods.
The entire town was evacuated more than a week ago after the Rangitāiki River burst its banks during heavy rainfall.
While most of the Bay of Plenty town's 1600 residents have since returned home, several hundred houses in the area remain seriously damaged.
According to the Whakatāne District Council, 240 houses have been yellow-stickered, which means they were not yet safe to live in, and 14 more will have to be demolished.
The government yesterday activated a scheme connecting displaced locals with nearby accommodation, such as holiday homes or hotels.
It urged flood-affected residents to sign up to [www.temporaryaccommodation.mbie.govt.nz the service online].
Housing Minister Nick Smith said the government was also looking into opening a temporary housing village, like those set up after the Canterbury earthquakes.
That decision would be made after determining exactly how many people were in need of help.
"What we know from both Christchurch and Kaikōura is that it takes some time to get a feel for what the shortage is and whether there is a need for additional support."
Labour's civil defence spokesperson Clare Curran said the government needed to make housing "priority number one" in the area.
"People can only stay with whānau for a certain amount of time. They need their space. They need some sort of short term certainty."
She said there was "almost no spare rental accommodation" in the area and hoped planning was well-advanced for a temporary housing village to be set up.
It was "unrealistic" to think that baches or rental accommodation alone could house all those displaced, Ms Curran said.
NZ First housing spokesperson Denis O'Rourke also supported such a complex being set up.
"Living in Christchurch, I'm aware it worked very well after the earthquake... it's quite a good idea to cluster them so you can provide the services that you need."
The government set up four temporary accommodation villages in Canterbury to help meet increasing demand for short term rental housing after the earthquake.
One has already been shut down and two more will close in June.
The complexes were made available for people whose homes were uninhabitable and needed a place to rent while their home was repaired or rebuilt.