Tenants sleeping in pantries, stairwells and shipping containers have prompted Sydney's council to appoint a former Scotland Yard investigator to tackle illegal housing.

Sydney Lord Mayor Clover Moore said discoveries by city investigators included 58 beds in a three-bedroom house, people sleeping in apartment building fire stairwells, cockroach-infested kitchens and disconnected smoke detectors.

She said the council had brought in "heavy hitters" to investigate the problem, headed by senior detective Roy Cottam, who has worked with Scotland Yard's Specialist Operations Command as well as the New South Wales Police Integrity Commission.

He will be in charge of four investigators who have held roles in NSW Police and the Royal Australian Corps of Military Police.

"Our officers are able to identify where there are problems, but we realise they don't have the right investigative skills to find out who's organising this accommodation and how we can get action on it," she said.

Tenants have been sleeping in bathrooms. ( Supplied: City of Sydney )

"So that's why we've brought in the heavy hitters here."

Sydney investigators have found: 58 beds and 19 illegally constructed bedrooms in a three-bedroom house

58 beds and 19 illegally constructed bedrooms in a three-bedroom house Tenants sleeping in bathrooms

Tenants sleeping in bathrooms A tenant sleeping in a pantry

A tenant sleeping in a pantry 16 tenants living in a two-bedroom apartment

16 tenants living in a two-bedroom apartment Apartment kitchens with serious cockroach infestations

Apartment kitchens with serious cockroach infestations Disconnected smoke detectors

Disconnected smoke detectors Tenants sleeping in apartment building fire stairwells with fire doors damaged or left open

Tenants sleeping in apartment building fire stairwells with fire doors damaged or left open People sleeping in rooms with no natural light or ventilation

People sleeping in rooms with no natural light or ventilation Landlords threatening to steal personal items or withhold bond refunds if tenants complain about living conditions

In July last year, a fire in Sydney's inner west shone the spotlight on illegal accommodation providers when 14 people, mostly from Korea and Japan, had to be rescued from their burning makeshift homes.

They had been living in squalor in Alexandria. Some slept on beds in old minibuses and others were living in a shipping container.

In another case in central Sydney a landlord had crammed up to 14 people into a two-bedroom flat and charged them each $150 a week.

There are 38 investigations being carried out by the City of Sydney and the new squad will take charge of every case.

The council's specialist team has already carried out 22 raids and lead investigator Senior Detective Cottam said prosecutions were imminent.

He said the team had executed more than 20 search warrants during raids in the past two months, gathering evidence to combat the criminal networks managing the properties.

"They're sophisticated in that they try and cover themselves by names and building premises and stuff like that," he said.

"But really we can identify it in relatively quick time and then it's about proving their connections to the business and their place in that business.

"And it might not be one person, it might a syndicate of three or four people that are managing these networks."

Illegal accommodation providers 'being watched'

Unveiling the new investigative team, Cr Moore warned illegal accommodation providers they were being watched.

"Without wanting to sound too much like George W, we are sending a very strong message that we are coming after them," she said.

She said too many students and young workers were living in third-world conditions and being exploited by landlords.

"It's a terrible situation for a city like Sydney.

"You have young students whose parents are sending them to Sydney thinking they're going to be safe finding themselves in squalor, in unsafe situations.

"Or you have young travellers who see wonderful scenes of Sydney and apply for accommodation and end up in one of these terrible places."

The council is also launching an educational campaign targeting universities and tertiary institutions to help them advise students on safe rental choices.