A homeless family shared a hotel room for more than three years after a council made mistakes with their housing application, an ombudsman said.
Luke and Olga Burns rented the rooms without cooking facilities while Bristol City Council repeatedly refused them a place on the housing register.
The council has apologised after an investigation criticised its housing and children’s services’ departments.
The ombudsman said the authority should pay the family £9,000 in compensation.
Mr and Mrs Burns say they rented rooms in 12 different Premier Inns using their housing benefit and money from relatives after they were evicted from their privately-rented flat because of flood damage.
An investigation by the Local Government and Social Care Ombudsman said the couple, who then had two children, first asked the city council for help in April 2014.
After the birth of their third child, it said the authority still refused to assess their needs.
The ombudsman also criticised the council for trying to charge the family for storing their belongings.
It said the family had found private lets but lost the properties because the council took too long to consider their requests help to pay the deposit.
In a joint statement, homes and communities councillor Paul Smith and families councillor Helen Goodwin apologised and said: “While we recognise that the situation was unacceptable for a family with young children, we do believe that we tried to do our best for the family on a number of occasions.”
Speaking to the BBC’s Victoria Derbyshire programme, Mr Smith said: “The family came from outside Bristol into a hotel and then contacted us.
“At one stage they were deemed to be intentionally homeless because they refused offers of temporary accommodation but we did not act properly, particularly in relation to the children and their needs, and there are real issues there which we have addressed.”
The ombudsman said the council had agreed to wipe off the contribution the father agreed to make for storage costs and said the council should pay £9,000 for the delay and distress caused.