More than 300 people are waiting for social housing in the city alone with many facing homelessness in the meantime.
Vinnies NSW is calling on the state government to increase social housing in a bid to improve the "chronic" homelessness problem.
According to NSW Department of Family and Community Services, 318 people in Wagga are on the list for social housing and are facing between two and five years wait.
Wagga St Vincent de Paul's Joanne Crawley said about 50 to 60 per cent of their clients on Newstart are spending a quarter of their income on rent.
"Wagga is a desperate place," she said.
"We probably have about 30 homeless people, including those who are couch surfing ... spending a quarter on income on rent leaves nothing for entertainment, most can't afford a car, they don't go out to restaurants, or to the movies.
"They basically are forced to stay at home or huddle with friends; it's very tough and there's nothing out there."
Ms Crawley said a least 100 more accommodation options for the homeless are needed in Wagga.
"We've been so good to refugees, helping them get into larger homes because they often have big families, but people on low income are not getting ahead," she said.
"Vinnies and FACS are under the helpful banner where we're doing everything we can to help these people and provide roofs over their heads."
October 10 marks World Homeless Day and Vinnies NSW CEO Jack de Groot said more than 100,000 people are on the wait list statewide.
"It's self-evident that more housing will help address the chronic homelessness problem, but this isn't translating into enough concrete action on the ground," Mr de Groot said.
"The NSW government has a building plan, but we need to urgently ramp that up and take major action to house our growing population.
" ... Vinnies has launched Build Homes, Build Hope, a new campaign calling on the government to build an extra 5000 social housing properties per year for the next decade."
Social housing is rental housing funded by government and provided by government or non-government organisations for those who are unable to secure suitable accommodation in the private market.
A recent report from the Productivity Commission showed that many households on low incomes are barely getting by in private rentals.
The report found that 66 per cent of low-income households spend over 30 per cent of their income on rent.
"Social housing accounts for only four per cent of Australian homes, whereas in the UK it's 16 per cent," Mr de Groot said.
"We're failing people on low incomes."