Young people should be given priority for public housing close to public transport and services, the Youth Network of Tasmania says.
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The body is one of more than 30 groups and individuals that has made submissions to a parliamentary inquiry on housing affordability which starts hearings next week.
YNOT chief executive Tania Hunt said there needed to be greater investment in long-term supported accommodation for young people and alternative models for homeless youth with complex needs.
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"The demand for housing and homelessness services continues to outstrip supply, despite recent commitments from the state government to invest in additional youth accommodation services," she said.
Ms Hunt said young people spent 50 per cent or more of their income on rent in suburbs with accessible public transport or close to education and employment.
"Shared housing is the only option for many young Tasmanians on low incomes within the private rental market," she said.
"Once a cost saving measure for students, shared housing is becoming increasingly more expensive and can cost up to or above 50 per cent of a young person's Youth Allowance."
Karinya Young Womens Service youth work co-ordinator Ria Brink said there was a need to provide long-term accommodation options for young people under the age of 16.
"Extra crisis accommodation services for this age group will not address the lack of stable accommodation and support for this cohort," she said.
The head of sexual support service Laurel House, Justine Brooks, said affordable medium and long-term housing options for those escaping domestic violence needed to be increased.
She said this would also take pressure off the state's crisis shelter system.
Ms Brooks said the provision of stable housing for a family violence victim increased their recovery outcomes and decreased the likelihood of them returning to a violent situation.
She said there needed to be an increase of one-bedrooms units for domestic violence perpetrators who had been removed from the family home.
"While it can be counter intuitive to provide support to the perpetrator, particularly if they are facing legal action, without affordable and stable housing, the rehabilitation prospects for that person are negligible," Ms Brooks said.
"Reoffences are almost guaranteed and the cycle continues involving more vulnerable people, including children."
The first of the inquiry's hearings starts on Tuesday.
