Squatters living in formerly vacant, water-damaged homes have vowed to stay despite a premier pledging to demolish the condemned properties.
Multiple flood warnings remain in place across NSW, although waters are receding after heavy rain from ex-tropical cyclone Alfred.
NSW Premier Chris Minns on Tuesday singled out "overseas visitors, tourists, backpackers" living in homes left empty from a state buyback scheme for properties inundated during devastating 2022 floods.
"We bought those houses so that we could keep communities safe ... and to have squatters move in off the back of that is completely unacceptable," he said of the properties in the northern NSW town of Lismore."
"The housing problems are not going to be solved by moving people into flood-prone land.
"We have to draw a line in the sand here and that means demolishing those houses and ensuring that we can get on with life in the Northern Rivers."
About 40 people had been living in eight flood-ravaged homes near the Lismore city centre and the premier said previous eviction notices had been served to no avail.
Roisin, who has been living in northern NSW for several years before setting up camp in one of the homes, said the community had been accepting and some neighbours had allowed them to share their electricity.
The majority of the squatters were not backpackers, as the premier claimed, but people squeezed out by soaring rents and a cost-of-living crisis, she said.
"There doesn't seem something suitable between emergency housing and renting a place," she told AAP.
"They're forcing a wedge issue to cause a fracture in the community and they're very fixated on us staying there."
The squatters had been in talks with Reconstruction Authority officials, but they were vowing to stay.
"We agree the flood plain is not an ideal place to live but it's a natural unfolding of a lack of housing options," Roisin said.
The Northern Rivers region, which includes Lismore, has the highest number of rough-sleepers in the state amid a dire shortage of affordable properties.
Mr Minns said the squatters had tried to jump the queue to access social housing during talks with government officials about leaving the properties.
Another squatter, Tina, said she and her son Tyson had been living in one of the properties after escaping a domestic violence situation.
"There is an epidemic of women living in their cars and we shouldn't be living like this," she said.
Greens MP Sue Higginson, who lives outside Lismore, accused the premier of being divisive and demonising those in the community who supported the squatters.
"These people created no risk to themselves, the SES, or any of the community as a result of occupying homes," she said.
Federal Nationals MP Kevin Hogan, whose electorate includes Lismore, said locals had expressed concerns about the squatters' presence.
"The community was certainly coming to my office and getting in touch with me regularly ... people are coming and going, none of them were locals, none of them were flood-affected people," he said.
