The reforms would help the Mount Alexander Shire grapple with crippling housing shortages and comes as the City of Greater Bendigo awaits news on whether it can get the power to move people from a Huntly park.

Councillors will on Tuesday decide whether to launch a review into Mount Alexander Shire's local law 13.

The law caps camping and other forms of temporary residence on properties that have dwellings, and bans it on those without.

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Tiny house advocates say the rule drags on sustainable living and solutions for homelessness in the shire.

"The current laws around tiny houses are too short term, and do not go far enough in offering a realistic, affordable, more permanent solution to our housing crisis," Cr Driscoll said in documents tabled ahead of the vote.

"As an additional choice for accommodation, tiny houses can offer dignity to people at risk of homelessness as well as for people who wish to live more sustainably."

Tiny houses have become increasingly prominent in recent years with specialist builders among those scaling down homes' footprints, sometimes to the size of a large caravan.

Shire officers say they can complete a review by the end of August, if Tuesday's vote is successful.

Other councils are juggling housing needs with regulations and other responsibilities.

The City of Greater Bendigo recently recently asked state authorities to help it ban camping in several areas including the Huntly Lions Park.

Mayor Andrea Metcalf said it was a challenging issue.

The park does not meet all the safety requirements and could be a hazard for those camping there long-term, she has previously said.

"Council is not in the business of providing this type of service to the public as there are many alternate providers in the region."

But those living in the park already have few options.

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A number of them are reluctant to move out of Bendigo because they have work, support networks and family responsibilities in the area.

Some rely on nearby bus stops and amenities.

Haven; Home, Safe has been trying to help them find homes but rental vacancies have sometimes been less than one per cent this year.

Cr Metcalf said the council is working with providers on solutions as well as affordable housing policies.

The Department of Environment, Land, Water and Planning is currently assessing the council's camping ban and expects to make a decision at a later date.

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