More than 210,000 children are estimated to be homeless, with some being temporarily housed in converted shipping containers, a report says.
The Children's Commissioner for England says that as well as the 124,000 children officially homeless, a further 90,000 are estimated to be "sofa-surfing".
Her report tells of families housed in repurposed shipping containers and office blocks, and whole families living in tiny spaces.
Councils blamed a £159m funding gap.
A spokesman for the Department for Communities and Local Government said anyone who feels they have been placed in unsuitable accommodation should request a review.
The report, entitled Bleak Houses, found the use of shipping containers as temporary accommodation was leading to cramped conditions and inhospitable temperatures.
One mother told the report's authors she had to sleep with the front door wide open in the summer and her baby got heat rash - but in winter it was too cold.
Often, the units have not been properly designed with children in mind, the report found, with ovens and other dangers too close to the ground and in reach of very young children.
The Children's Commissioner, Anne Longfield, who visited children affected by homelessness, said it was sad and surprising to learn of the new developments councils were turning to in order to deal with the problem.
"Office block conversions, in which whole families live in single rooms barely bigger than a parking space, and shipping containers which are blisteringly hot in summer and freezing in the winter months," she said.
The report does not contain data on how many councils are using shipping containers to house families, but it said areas where this happens include Brighton, Cardiff, Ealing, in west London, and Bristol.
Bristol City Council said it did not direct families to the containers and only provided land for them, and the units were instead operated by a charity.
The Children's Commissioner also expressed concern about families living in converted offices.
In Harlow, Essex, 13 office blocks have been converted into more than 1,000 individual flats.
In one such building, Templefields House, some units measure 18 sq m and are being used to house whole families, with parents and children sleeping in a single room also used as the kitchen.
In the area surrounding another building, Terminus House, also in Harlow, crime rose by 20% in the first 10 months after tenants moved there in April 2018.
Office block conversions are often located on or near industrial estates, presenting risks to safety, and are far away from shops and other amenities.
Living in the developments can also be a "stigmatising experience", the report said, with children being referred to as "office block kids".
This was "compounding their sense of isolation and difference to their peers".
B&Bs are also being used as temporary accommodation, creating "intimidating and potentially unsafe environments" for children.
The bathrooms in B&Bs are often shared with other residents and vulnerable adults, including those with mental health or drug abuse problems.
Ealing Council, which has converted shipping containers into temporary housing, says the accommodation is much better than standard B&Bs with shared facilities.
It says it has been pushed into using novel solutions because of the wider housing crisis.
Of the 2,420 families known to be living in B&Bs in December 2018, a third had been there for more than six weeks - despite this being unlawful.
Analysis in the report, released on Wednesday, found that in 2017, around two in five children in temporary accommodation had been there for at least six months.
Around one in 20 - an estimated 6,000 children - had been there for at least a year.
The figures used for the analysis of those in temporary accommodation relate to the end of 2018, while the number of those estimated to be sofa-surfing are taken from an official household survey for the year 2016-17.
The report warns that a further 375,000 children in England are in households that have fallen behind on rent or mortgage payments.
This means thousands more are at financial risk of becoming homeless in the future.
Polly Neate, chief executive of housing and homelessness charity, Shelter, said no child should be spending months, if not years, living in a shipping container, office block or emergency B&B.
She said the charity constantly heard of struggling families being forced to accept "downright dangerous accommodation" because they had nowhere else to go.
She said housing benefit must be increased urgently and that three million more social homes needed to be built.
Local Government Association housing spokesman Martin Tett said councils desperately wanted to find every family a secure home.
"However, the severe lack of social rented homes available in which to house families means councils have no choice but to place households in temporary accommodation."
He highlighted a £159m funding gap in councils' homelessness services budgets, and urged the government to fund and give back councils their historic role of building homes with the right infrastructure required.
The DCLG spokesman said the government had invested £1.2bn to tackle all types of homelessness which had helped reduce the number of families in B&B accommodation.
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