More than 900 households have been placed in temporary accommodation in Birmingham because of a lack of affordable housing, ministers have been warned.
MP Shabana Mahmood (Lab Ladywood) said the figures showed the city needs more housing.
She also called for reform of the private rented sector, so that rent increases were easier for tenants to plan for.
The MP highlighted the case of one constituent, a mother with two daughters, who had been moved into bed and breakfast accommodation and then into a badly-maintained one bedroom flat.
Ms Mahmood said: “As she was talking to me, she expressed how utterly terrified she was when looking ahead to Christmas and how the lack of security she felt from the lack of a permanent roof over her and her daughters’ heads was a ball of tension sitting in the pit of stomach.”
There were 922 households in temporary accommodation in Birmingham in the last financial year, up by a third compared to the year previously, she said – and 115 of these were in bed and breakfast accommodation.
In the past, most people who became homeless had problems such as mental illnesses, or were escaping domestic violence.
But increasingly the problem was simply that there was a lack of accommodation that people could afford, she said.
“Some months ago, for example, I met a couple who had a business a few years ago, but it had run into trouble as a result of the recession. They had lost it and could not keep up the payments on their home, so they lost their home as well.”
Ms Mahmood added: “The two main, connected reasons are that the cost of renting is going up – since 2010, it has increased by more than twice as much as wages – and house building is at its lowest peacetime level since the 1920s.
“The failure to deal with housing supply is not only causing a huge strain now, but storing deep problems for us as a society.”
She added: “That major issue has been compounded by the introduction and imposition of the bedroom tax. In Birmingham, a little more than 5,000 city council tenants are affected.
“As of yesterday, a little more than 2,000 or so of them were in arrears as a result of the bedroom tax, while the city had only five bedsits and 54 one-bedroom flats available.”
Speaking in the same debate, MP Jim Cunningham (Lab Coventry South) said: “One of the problems is that sufficient social housing is not being built, which puts pressure on private landlords to put up rents, because of the laws of supply and demand.”
He asked: “Is it not time that the Government got some sort of social housing programme under way?”
Ministers announced this week that West Midlands councils would receive £80 million in payments from a scheme called the New Homes Bonus, which rewards them for building new homes or bringing empty homes back into use.
In Birmingham, 3,760 empty units have been brought back into use, as well as 469 in Coventry, 495 in Sandwell, 733 in Stoke, 476 in Wolverhampton and 409 in Wyre Forest.
Housing Minister Kris Hopkins said: “Councils have received over £2 billion for their part in getting Britain building, and leading to housing construction reaching its highest levels for seven years.
“And they are free to spend the money any way they like to benefit their local communities – whether that’s supporting frontline services, providing new facilities or freezing council tax.”