Stoke-on-Trent could not deal with a large influx of people, a housing association has said.
Newham Council said it had written to more than 1,000 organisations around the country asking them if they could find homes for people.
It said it was struggling to deal with the number of people pushed out of more central parts of London.
Stoke-on-Trent's Brighter Futures Housing Association said the city was "already under pressure".
Gill Brown, chief executive of Brighter Futures, said the association had been offered a "premium price" to find accommodation for up to 500 families from Newham.
"I'm quite surprised and shocked that anyone would make such a proposal without really thinking carefully about the impact both on the people being moved up and our communities in Stoke," she said.
"The real issue for us is the concern for vulnerable people who are being moved up.
"What about the education services, the social services, the health services and the jobs?"
Labour MP for Stoke Central Tristram Hunt said: "We've seen in Stoke-on-Trent in the past, when you put vulnerable people straight into the city without any connections, and we saw this with the dispersal of refugees and asylum seekers, it creates all sorts of problems.
"It doesn't do those individuals much good and it leads to ugly and divisive politics."
Stoke-on-Trent City Council said it was "very concerned" by Newham's proposals.
The Labour-led authority said it already had 3,000 individuals or families on its waiting list for social housing and that its duty was to help local people.
Brighter Futures also added there were some 200 people in the city who were homeless.
Ms Brown likened the plans in the London borough to "social cleansing", but said there could be knock-on consequences for Stoke-on-Trent.
Sinead Butters from Aspire Housing Association, which serves North Staffordshire said it had not yet been approached by Newham Council, but that housing problems should be tackled locally, rather than "exported" to another area.
Ms Brown added: "We all have to accept, whether it's in London or in Stoke, there is simply not enough housing.
"We haven't been building enough housing in this country for many years."