The Waitaki District Council, which has received a raft of complaints, said new laws have made the situation complicated to resolve.
There were "challenging circumstances with vulnerable people involved, including very young children".
Two house buses and two trailer homes are parked in Stoke St alongside a clutter of household items and construction materials, which are piled on the side of the road.
The street is home to a retirement complex housing more than 200 residents and an observatory which has shut down public viewings because of the mess.
It is believed all of the mobile homes belong to one family.
They have been parked there for about three weeks.
The issue has concerned nearby permanent residents in the street, including one woman who said the house buses made it hard to see oncoming traffic.
She did not want to let her children play on their scooters in the street while they were there.
Another said it was common to hear motorists slamming on their brakes at night as they tried to drive along the street.
Observatory Village manager Scott Elliffe said it was "obviously" concerned for its staff and residents.
There was only one way in and out of the village and the mobile homes compromised its safety and security.
"We’ve got nearly 100 staff here, we’ve got 200-plus residents and all of those residents have families that are visiting on a regular basis."
There had been a "constant stream" of complaints from village residents and their families.
The village was doing its best to work with the council to manage the situation and he was hopeful an amicable solution could be reached.
The North Otago Astronomical Society has had to stop running public events because of the safety issues caused by the buses.
Member Hans Brienesse said it had to turn off the street lights during events to remove light pollution, however it was unsafe to do so while the street was occupied.
A council spokeswoman said amendments to the Freedom Camping Act in June exempt people genuinely experiencing homelessness, or people without other legitimate accommodation, from being moved on or given infringements for living in their vehicles.
The changes made the situation complicated to resolve, but the council was monitoring the situation and working with the tenants to find a solution that worked for everyone.
The council could not provide the number of complaints, but said it was "averaging about one or so phone calls per day".
Complaints were also being made to councillors directly and at the council customer service desk.
Unless a call contained new information it would not be logged, she said.
Mr Elliffe echoed this sentiment.
"We need to have it sorted, but we need to do it in a way that manages the best interest of everybody.
"While we would like it to happen tomorrow, it just isn’t that easy."
The tenants of the buses could not be reached for comment before the Oamaru Mail went to print.
