A council has agreed to rehouse homeless people who had been placed in temporary accommodation in other areas.
Harlow Council has complained that vulnerable people from London boroughs had been placed into converted office blocks in non-residential areas.
Now Enfield Council has agreed to remove its residents from the town within six months.
Harlow council leader Mark Ingall has called on other London boroughs to follow the authority’s lead.
Councils in the capital rehomed residents in temporary flats built under Permitted Development laws.
These rights allow developers to turn offices into residential premises without planning permission.
More than 1,000 homes had been created this way in Harlow in Essex, which has been described as “human warehousing” by the town’s council.
But after meetings between the leaders of the Labour-run Harlow and Enfield councils, the north London authority agreed to move residents back.
Enfield leader Nesil Caliskan said that while a shortage of housing stock and affordable homes created difficulties, the council’s “ambitious” development plans would see 10,000 properties built over the next 10 years.
She said: “This is a London-wide issue of pressure on housing and London boroughs not being able to accommodate those of our residents who find themselves homeless.
“We have residents from inner London boroughs placed in our own area.”
Ms Caliskan added she was hopeful of moving Enfield residents out of Harlow’s Redstone House within six months.
Mr Ingall said he would be speaking to other council leaders and using the example of Enfield to persuade them to follow suit.
“I think the reason the leader of Enfield can take this decision is because morally it is the right thing to do,” he said.
“I am going to visit all the other leaders of councils housing their residents in Harlow and say ‘Enfield have done it, it’s the right thing to do’.”