On Sunday, she was happy living in the present, painting a banner and playing with her four grandchildren outside the pretty weatherboard she is squatting in, in Collingwood.

The 50 or so squatters, including children, occupying 14 houses in Bendigo Street, held a street festival in bright sunshine, after learning on Friday they would not be forcibly evicted for the next three weeks. 

The houses have been leased by the Salvation Army to house homeless families, but the occupiers have vowed to stay put.

Some that The Age spoke to said they had nowhere else to go; others seek to force the government to address the lack of affordable inner-city public housing.

Ms Edwards, 46, who is Koori, said she had left secure housing due to domestic violence and had been sleeping in shop alcoves and railway stations.

'Her' house in Bendigo Street has running water, gas and electricity, but above all, a place where her grandchildren, aged 8, 6, 3, and 1,can visit

"A place to come, and be with me. I couldn't have them when I was on the street."

She would gladly pay rent to stay here. Ms Edwards says she hadn't been offered housing and might have to go back to sleeping on the streets if she is evicted.

She hates to think about eviction. "There's a few people that have got kids here and it can be terrifying for them, if they're going to use force."

Ms Edwards' cousin, Taungurung elder Larry Walsh called on the squatters to fight for a more permanent solution to homelessness.

He told the crowd squatters had been accused of stealing others' land by living in Bendigo Street, but their land had been stolen by white people. "Don't you dare accuse us of thieving, when you bastards come in, under the disguise of churches, stole our land, stole our culture and you dare to accuse me of thieving? You f---in' hypocrites."

He said thanks to the squatting at Bendigo Street, "the press is going, 'yes, there is a homeless problem', and now the government is trying to find a way of stopping that keeping spreading."

He said his people would not agree on a solution in Bendigo Street until the government guaranteed Kooris the right to housing, health and education.

"We're [the Aboriginal people] a quarter of the homeless [in Victoria], and yet we're only 1.75 per cent of the population ... 8000 to 10,000 Aboriginal people homeless in a country that was theirs for thousands and thousands of generations."

Mr Walsh said some people had been on housing waiting lists for more than 10 years. "It's not good enough ... housing is a public right."