The Whakatāne District Council wants to use a newly-purchased holiday park as temporary housing for Edgecumbe residents who can't yet go back to their homes.
The mayor, Tony Bonne, said the council approved the purchase of the Whakatāne Holiday Park at its meeting this week.
Mr Bonne told Checkpoint with John Campbell, while it was intended as a strategic tourism asset for the council, they could also use it to fill some of the need for temporary housing.
He said leaving people to stay in motels was not a long-term option.
"Insurance companies have limits for how long they can stay there, so we're working closely with the community," he said.
"We knew it was going to be a challenge and this solution may just be a temporary one for some people, it's not going to be the end of the fix."
The Ministry of Business, Innovation and Employment was putting together a list of people who needed temporary housing, and the council was working with the community on other solutions, Mr Bonne said.
They were also looking at other options to allow people to get their houses repaired sooner rather than later.
Mr Bonne said there was a shortage of builders in the town, which could present problems in the coming months.
More than 1000 volunteers have put in 5500 hours of work cleaning up the town since cordons were lifted after the town was flooded two weeks ago.