Affordable rental housing has all but vanished from Port Stephens, with council figures revealing it makes up less than 0.001 per cent of homes in the region.
Social services providers say they are "overwhelmed" by the need for their services as more and more people struggle to find stable housing.
The problem is compounded by a 0.8 per cent vacancy rate, meaning no affordable housing was available at the time the figures were collated.
The Hunter vacancy rate for August was 1.2 per cent.
More than 22,000 local households would qualify for that housing under state government income thresholds, exposing a chasm between need and supply in one of the Hunter's fastest-growing local government areas.
Figures highlighted in a draft Port Stephens Affordable Housing Action Plan (AHAP), which will go before council on Tuesday, also showed the median rental cost had risen by $300 in five years to $670.
The median house price also rose by more than $180,000 to $942,000 from 2021 to 2026.
Port Stephens Family and Neighbourhood Services assistant manager Ann Fletcher said the conditions were a "perfect storm" pushing more people into homelessness or housing insecurity.
She said demand for homelessness support routinely outstripped funding months before the financial year was out.
"Our funding is to see 348 individuals a year, and typically by about February we've already seen that many people," she said.
"So essentially, from March to July, we're working for free."
She said the people coming through her service's doors had also changed, extending well beyond the traditional image of homelessness into people in steady jobs on ordinary wages.
"We're now really seeing a shift into that middle-income range, people who would typically never come to a service like ours," she said.
"Sure, they're paying their rent, but they're coming to us for food, they're coming to us for help with their bills. God forbid something happens to the car or a kid gets sick.
"If you're on JobSeeker or Youth Allowance, there is essentially nowhere in the whole of Australia you can afford to rent.
If you're on JobSeeker or Youth Allowance, there is essentially nowhere in the whole of Australia you can afford to rent.
"On JobSeeker you might afford a room in a share house. On Youth Allowance, forget it."
Older, long-term renters were also increasingly being pushed into housing stress, Ms Fletcher said, describing one client, a pensioner in his 70s, who had rented the same home for 12 years before being hit with a $200-a-week rent increase.
"It's not like they didn't know his circumstances, he was a pensioner, there's no way he could increase his income," she said.
"You just think, how is that legal? Of course it is, because we've set up our housing market as an investment strategy, as opposed to a basic human right."
The report states 41 per cent of rental households are in rental stress in Port Stephens after a 10 per cent rise in rental costs over the past year.
This is compared with 36 per cent across NSW.
The council's report also projects the permanent population of Port Stephens would rise from around 75,000 to more than 88,000 in 2041, requiring an additional 11,000 dwellings.
The AHAP sets out how the council intends to lobby and plan for more affordable housing across the shire, tackling a shortage officers say is squeezing young people trying to leave home, young families, older residents wanting to downsize or age in place, and key workers being priced out of the area altogether.
Teachers, health and childcare staff, aged and disability care workers, hospitality employees and emergency services staff are named in the report as at risk of being unable to afford to live locally, a trend that could translate into staffing shortages and weaker services across Port Stephens.
Mayor Leah Anderson, in a preamble for the document, said when housing pressure builds, this has a direct impact on the community's lifestyle, making it harder for people to live day-to-day life as they want to.
"I know for many in the community, the dream of a secure home is feeling more out of reach," she said.
"Housing-related costs continue to climb, making it increasingly difficult for parts of our community to feel safe and secure.
"We want housing to be available and affordable to current and future generations of our community.
"This is an essential part of the Port Stephens way of life and what our community deserves."
The plan sets out 20 actions across three priority areas: advocacy, land use planning, and partnerships with outside stakeholders.
Under the plan, the council commits to lobbying the state and federal governments for more social and affordable housing investment in Port Stephens.
A short-term action also proposes a public campaign to "bust myths" about affordable housing and pitch Port Stephens to investors as a location to build it.
Other planning actions include considering fee discounts for developments with an affordable housing component, investigating faster approval pathways, and developing a longer-term "pattern book" of pre-approved affordable housing designs to speed up assessments.
Longer-term, the council would investigate using its own land to offer incentives for key worker and first-home-buyer housing.
Ms Fletcher welcomed the council's engagement on the issue but cautioned that the term "affordable housing" was often misunderstood, with some developments advertised as affordable still priced well beyond what most residents earned.
"It's affordable as per the market, it's not affordable as per income," she said.
