People in central-western NSW are also still living in caravans waiting for temporary "pods" to arrive after floods struck in November 2022, a scathing report found.
Temporary villages were rapidly set up in response to unprecedented inundation in the Northern Rivers in February 2022 and later the central-west.
But there was no plan in place to guide the response, which did not meet the demand, NSW auditor-general Margaret Crawford found in a report released on Thursday.
An extensive waitlist remains for temporary housing and there were no long-term plans to transition residents out of temporary villages despite a deadline being placed on their removal.
As many as 1440 people were in emergency accommodation in motels, motor homes and camps in April 2022, while more than 720 households were still on the waitlist for temporary housing in November.
The state was not as well prepared as it could have been for the use of temporary housing in the wake of disasters, having failed to heed lessons from the 2019-20 bushfires, the audit found.
Broader housing challenges across the state were increasing the risk people might not find long-term accommodation for a "significant amount of time", it added.
"The NSW government does not have a clear plan around how long the temporary housing villages are intended to remain in place," the report said.
They are subject to a legislated five-year maximum before they need to be demobilised under state housing policies.
Lessons were learned from Lismore by the time of the central-west floods, leading to the rapid establishment of a program to house people in caravans on private properties while people waited for pods or repairs to their homes.
By the end of 2024 there should be a whole-of-government plan for temporary housing in response to emergency events and a strategy to transition people into long-term accommodation, Ms Crawford recommended.
A parcel of Southern Cross University-owned land has been made available in Lismore for more than 400 new houses, but both land and homes are unlikely to be up for sale until at least 2026.
