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Recent trouble at Milford Haven's Mount Estate highlights the need to modify the county council's housing policy, Councillor Tom Sinclair told the authority on Thursday.
He said the problems affected people's desire to live there and, if they refused an offered tenancy, they went to the bottom of the list.
This created concentrations of certain types of tenants, which led to social problems caused by unintentional social engineering, he said.
Cllr John Allen agreed that there was inherent inflexibility in the allocation system, into which local members no longer had any input.
Cllr Norman Parry described the effect on rural communities when families were uprooted and given tenancies in urban areas as 'ethnic cleansing'.
Cllr Pearl Llewellyn cited similar problems at Monkton and urged a similar multi-agency operation there to sort it out. Single tenants were causing mayhem and empty homes were being vandalised by marauding children from other areas, she claimed.
A block of seven flats had been empty for 15 months and subjected to frequent vandalism. She said Monkton was now a vibrant community with expensive homes - including that of Lib-Dem leader Cllr John Allen - and more staff, quicker turn-rounds and greater enforcement of tenancy agreements were needed to solve the problem.
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