Edinburgh risks repeating the housing mistakes that have made central London inaccessible to many people, amid a growing homelessness crisis resulting in hundreds of families being stuck in inadequate B&Bs for months at a time, a charity has warned.

Shelter Scotland told the Guardian that the Scottish capital was being harmed by long-term underinvestment in affordable housing, an acute shortage of suitable temporary accommodation for homeless people, and the growth of short-term lets such as Airbnb.

Graeme Brown, the director of Shelter Scotland, said: “What we are seeing is a hollowing out of affordable homes in the city centre, with rising homelessness throwing into stark relief this lack of housing supply.

“Edinburgh enjoys huge success as an international city, but we have to ask if it is starting to repeat the same housing mistakes that are so well documented in London, where the city is becoming increasingly unaffordable and inaccessible to ordinary households, not least to the most vulnerable in our society.”

Despite pioneering legislation introduced by Holyrood earlier this decade, statistics suggest progress in tackling homelessness has stalled, with more than 3,000 households assessed as homeless in Edinburgh each year.

The Scottish National party government pushed the issue back up the political agenda, last year pledging to build 50,000 affordable homes by 2021 (35,000 of them for social rent), and setting up a £50m fund and an action group aiming to eradicate homelessness.

But Brown warned: “We are at risk of slipping backwards on our world-leading approach to homelessness. We need to look at the system we have and understand why it’s not delivering, not just chase new initiatives as a distraction to making tough choices about where we need to focus or invest.”

With one in10 homeless families spending more than a year in temporary accommodation, Shelter Scotland is concerned that the focus on Housing First – the rapid rehousing model for entrenched rough sleepers, recently promoted by the successful Social Bite social enterprise and supported by the Scottish government – may divert limited resources away from more prevalent forms of homelessness.

Hundreds of rough sleepers in Scotland to be offered homes Read more

“There is an understandable excitement around the Housing First model and it is something Shelter Scotland has been advocating for the better part of a decade. However, in those places where Housing First has been successfully introduced, it has required a major investment of public funds to ensure that there is choice in terms of the types of suitable homes available, as well as the appropriate level of wraparound support for the individual. These are things that Scotland currently simply does not have and we cannot just ignore this reality,” Brown said.

Edinburgh council’s Homeless Task Force has promised to end the use of B&Bs for families by June, but Shelter Scotland is concerned that not enough progress is being made towards this commitment and that the legal time-limit of seven days is regularly broken. The charity also wants formal guidance on standards for B&Bs and temporary accommodation to be introduced.

One caseworker described a family with three children in their third week (two weeks more than the legal limit imposed by the council) at a Premier Inn hotel by the city ring road, with a teenager struggling to revise for upcoming exams using expensive hotel wifi, nowhere to wash school uniforms and the only place to buy food within walking distance being a local garage shop.

Brown added: “Edinburgh’s local housing stock is being diminished from a number of different areas, as Airbnb and short-term lets proliferate in the city centre. Luxury student flats are springing up all over the city, while close by to the Scottish parliament, dozens of families are homeless in unsuitable temporary accommodation.”

The Scottish Greens’ housing spokesperson, Andy Wightman, said the impact of short-term lets in Edinburgh was rapidly reducing the residential housing supply with a knock-on effect on more vulnerable groups.

“The rapid rise in short-term lets undermines the basic human right to housing,” he said. “There are now a staggering number of residential homes that are now effectively being marketed as ‘hotels’ with the majority having no planning permission, no safety regulations and no regard to families living in close proximity to them. A modern-day clearance is under way, as long-established communities are torn asunder in the face of global market forces.”

Airbnb has proposed to limit lettings offered in Edinburgh to 90 days a year, over and above the summer festival peak season, and the city council accepts that the proliferation of short-term lets is affecting housing supply, pointing to a working group which is examining how it can tackle the problem. Wightman has suggested the Scottish government could give councils powers to introduce a licensing scheme to regulate short-term lets.

The council’s housing and economy convenor, Kate Campbell, said: “We recognise that families shouldn’t be in B&Bs. There has been an increase in numbers beyond what we expected and we are looking at every possible angle for how to tackle this.”

She said all B&Bs undergo a high level of monitoring, and there were plans to give residents access to kitchens and washing machines.

“The ultimate solution is house building, and we have to focus on that. We are driving this through, with 2,000 affordable homes on site currently being built as part of the [Scottish government’s] 10-year commitment.”