Homelessness is now significant, acute or very acute for two-thirds of the nation's local councils, up from about 10 per cent in the 2010s, a University of New South Wales study has revealed.
About 167 councils were surveyed, with the study finding many had moved away from enforcement measures towards more support-focused responses.
But lead author Andrew Clarke, from the School of Social Sciences and City Futures Research Centre, said he had noticed a change since his research had completed.
"We started seeing all of these headlines about councils ... starting to crackdown on homelessness in their local area," he told AAP.
He pointed to reports from councils in Victoria and Queensland, which were forcibly moving people and confiscating their property, after years of more supportive strategies.
"This is really troubling because all the research suggests that this does nothing to solve homelessness," Dr Clarke said.
"In fact, it makes the problem worse."
The study, published in the Australian Journal of Social Issues, found councils were acting as the "eyes and ears" of local support networks by identifying rough sleepers and linking them to services.
But Dr Clarke said those approaches were coming under strain amid soaring rent and long social housing waitlists.
In NSW, the number of households on the priority social housing waitlist has more than doubled in four years to 12,478, according to Homelessness NSW.
The priority list included people who were homeless, fleeing domestic violence and those living in unsafe accommodation.
About 24,000 out of 56,000 people on Victoria's social housing waitlist are classified as urgent, and facing an average wait time of 17 months, according to the latest data.
Both state governments have committed to increasing social housing supply.
Dr Clarke said councils were under increasing pressure to respond more quickly to visible homelessness.
"What happens is there is a fatigue among the community and local businesses," he said.
"They get frustrated and then councils say, 'all right well this supportive response isn't working'."
The discovery of a dead baby at a homeless camp along the Murrumbidgee River, in Wagga Wagga on May 2, exposed the severity of conditions facing the country's most vulnerable people.
The incident, which police believe was not suspicious, fuelled calls to shore up housing supply and homeless services.
Councils can play an important role in responding to homelessness, Dr Clarke said, but lasting change required greater investment in social housing and stronger co-ordination between all levels of government.
"The takeaway is clear: councils are part of the solution, but they can't do it without the resources and housing supply needed to back them up," he said.
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