Ms Sheed said an ongoing investigation into homelessness by her office had revealed hundreds of unoccupied homes.
Ms Sheed said homelessness was increasing in Shepparton, mainly due to the lack of affordable housing.
“My office has spoken to dozens of individuals and organisations and examined many different data sets,” Ms Sheed said.
“One of the most telling sets of data was supplied by the local water authority, identifying hundreds of unoccupied houses in our region that are sitting idle.
“It is a terrible state of affairs that we have unused housing stock and a growing homelessness problem – but that also implies at least one potential solution.”
Ms Sheed said the community would need to rally together to combat homelessness.
She said her homelessness review would identify the unused housing that was held by private owners or the government.
The News understands Ms Sheed's office has asked Victorian Housing Minister Richard Wynne to release the official total of unused homes.
“And this is where our community can help,” Ms Sheed said.
“We’ve reached out to the private sector and put the question to government to identify as much of this unused stock as possible with an eye to returning it to the market or onto the social housing register.
“But I’m also keen to hear from any member of the public who knows of an unoccupied dwelling. We’ve all seen them; many of us have these types of properties on our own street and I encourage anyone to contact my office with such a location.
“We will add these properties to our register and investigate through whatever means necessary the ownership status and how long the property has sat idle.”
Ms Sheed said works started with BeyondHousing lobbying the government to fund the Department of Health & Human Services to renovate and maintain its unused housing stock.
She said although it would not solve homelessness, it would play a part reducing housing affordability stress.
Ms Sheed spoke at the upper house Legal and Social Issues Committee on Wednesday, and hopes the committee can deliver the necessary recommendations to enforce change to the housing and services system.
“This multi-party committee chaired by Fiona Patten MP is doing valuable work in examining the causes and potential solutions to one of the most critical issues both locally and in our state,” Ms Sheed said.