And while Hunter Water says it cannot comment on individual customers - indicating that the two former large-scale disability centres are still connected to sewage and water - it says knows of no problems within its own systems at Stockton or Port Stephens.

The idea of using at least some of the emptied buildings at Stockton and Tomaree as emergency housing was floated publicly at the start of the month by NSW Labor and Hunter welfare agencies.

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But the Department of Communities and Justice has rejected the idea, citing problems with the sewage system at Tomaree and sewage, water and power infrastructure at Stockton.

Making a private member's statement in the NSW lower house on Wednesday night, Ms Washington said she had "serious doubts" about the government's "excuse".

"I cannot believe the sewerage system has deteriorated irreversibly between last year and this year," Ms Washington said.

"I also cannot believe that the minister (Natasha Maclaren-Jones) responsible for fixing the homelessness crisis would rather see local families in Port Stephens live in their cars and tents instead of calling a plumber."

The last residents left the Stockton Centre in about August 2020 but Ms Washington said people were still living at Tomaree last year.

"I have serious doubts about the excuse that the Government has offered.

"Indeed, Hunter Water has confirmed to the Newcastle Herald that there are no issues with the network connection in the area.

"If the sewerage system is not operational, that is a decision made by the NSW government."

At the first annual Hunter Homeless Connect Day since 2019 at Broadmeadow on Wednesday, various homelessness service providers insisted the accommodation shortage was worsening.

Ms Washington told parliament on Wednesday night that long-term renters were being evicted, public housing waiting lists were long, and " too many people in my community of Port Stephens do not have a home".

"They are sleeping on the street, living in tents and cars, or endlessly couch surfing and relying on the goodwill of friends and family.

"There is a housing and homelessness crisis in Port Stephens, and I fear it is going to get much worse."

Sources familiar with the former disability centres told the Herald they believed there was little or nothing wrong with the sewage systems and that Hunter Water knew this.

Responding to Herald questions, the state-owned corporation said it was "not aware of any issues with our network" in those areas.

For privacy reasons it would not "disclose details of any customer's accounts" and said it had "no knowledge of the status of internal water or wastewater plumbing", which was the responsibility of the owner.

The Herald has sought a response from Communities and Justice on Ms Washington's speech and Hunter Water's statement.

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