Three drugs networks are operating around a block of flats labelled a “human warehouse”, the BBC has learned.
Crime near Terminus House in Harlow, Essex has increased since the converted office block, which houses many vulnerable people, opened last year.
Robert Halfon, Conservative MP for Harlow, had described the use of the building as “social cleansing”.
Caridon, which manages the property, said it had a “zero-tolerance approach to criminal and anti-social activity”.
About 250 people – many of whom were sent there by other councils – live mainly in studio flats.
They also include ex-offenders, former drug addicts, people who used to be homeless and children.
Minutes from A Safer Harlow Partnership meeting in May, seen by the BBC, revealed police had received 150 calls from Terminus House since it opened as a residential block in 2018.
The then police commander Ch Insp Matt Cornish said it had attracted “county lines” drug dealers and three drugs warrants had been executed at the building.
The BBC understands the use of so-called “crack house closure orders” were discussed at the meeting, attended by Caridon and Harlow Council.
Figures show crime there rose 45% in the first 10 months of it opening.
Five nearby businesses also reported an increased in anti-social behaviour and drug dealing in the area.
Paul Andreotti, who runs the nearby estate agents Guardian Residential, said: “There’s been a lot of single mothers that have come into my office over the last three months asking if there are any other places available.
“They’re living next to suspected drug dealers. “
Mark Ingall, leader of Harlow Council, said the council’s worse fears about Terminus House “have become a reality” and it has clearly “created and attracted crime.”
Danny Purton, Harlow Council environment portfolio holder, previously compared the use of office blocks for homes to “human warehousing”..
After Mr Halfon raised the issue of Terminus House in Parliament, the government announced it was reviewing its policy of allowing the conversion of offices into homes without planning permission.
Mr Halfon said the policy had “allowed London councillors to socially cleanse their most vulnerable families to places like Harlow”.
However, the accommodation provides a safety net for some people. Sarah Savill moved there in February with her 15-year-old son.
“I love it, personally. On my landing there are five to six flats. There are two families and the others are single people. I get on well with everyone. I don’t have any problems with anyone. You go in, shut your door and keep yourself to yourself,” she said.
A Caridon spokesman said it had 24-hour on-site security and CCTV.
Essex Police said Caridon had agreed to share information with officers and employ more “experienced staff”.
A spokesman said a team, including three constables and a sergeant, had been set up to tackle “community concerns around drug dealing and anti-social behaviour”.