Council flats were sitting empty and many people weren't aware they could apply to live in them when they turned 55.
"I think it's about communication - there are elderly people living in questionable circumstances who could very well be eligible for a council flat."
Mr Anderson said Housing New Zealand was selling off houses "left, right and centre".
Those who applied for a Housing New Zealand house were pushed towards the private sector. But the private sector didn't set rents according to incomes as Housing NZ did.
"As that pool of housing diminishes in Whanganui, more and more people are forced to go to the private sector.
"Now we have issues with people coming to see us - they're only getting $220 a week and they might have to pay $170 a week rent."
Mr Anderson said the council and the state needed to continue to be key players in providing social housing for the people of Whanganui.
"Most ratepayers would be okay thinking that they are providing a slight subsidy to the elderly to be housed - particularly the vulnerable elderly. I think the true test of any society is how they care for their elderly."
Mr Anderson is also chairman of the Whanganui Housing Trust, which has two emergency houses - one for women and one for men.
On average, it was taking one emergency accommodation inquiry a day in Whanganui, he said.
"Recently we've been turning families away because we haven't had room to accommodate them."
The University of Otago report showed 1336 people were homeless throughout the Manawatu-Whanganui region in 2013. More than a quarter of the region's homeless were aged under 15 and more than half under 25.
Mr Anderson said there was also work to be done around families in terms of the young and homeless.
"It's too easy for people to get together and have children and then - for whatever reason - abandon their responsibilities."
Nationally, the prevalence of homelessness grew by 15 per cent between the 2006 and 2013 Censuses, compared with a 9 per cent increase between 2001 and 2006.
In 2013, there were at least 41,000 homeless New Zealanders, or about one in every 100 people.
More than half of homeless adults were working, studying, or both. More than half of the homeless population were younger than 25.
People identifying in Pacific, Maori or Asian groups were over-represented in the homeless population.
Census data and administrative data from emergency accommodation providers were used to measure severe housing deprivation.
