The practice of housing migrants in hostels could replicate the problem of shantytowns created during the Great Depression, Wollongong City Council heard.
During the depression, a town of tents and makeshift accommodation sprang up around Port Kembla. The NSW government replaced them with a settlement called Spoonerville, that featured dirt-floor homes.
That settlement remained in place far longer than the council anticipated and it feared migrant hostels would follow in the same path.
At the meeting the council's health inspector, a Mr Way, tabled a report on the migrant hostels.
"While such conditions continue, New Australians are not given a decent chance to settle down in this country and be assimilated into the community," Mr Way said.
"The Government housing scheme should make provision for the housing of European migrants as family units in the same way as they have provided for British migrants."
Sign up for our newsletter to stay up to date.