BBC News, East
Council staff moved into the Greyhound Opening complex
Elderly people moved out of low-rent homes and replaced by local authority staff were sent letters by the city council informing them of their plans.
Tenants from Greyhound Opening, which has been earmarked for demolition, moved out of their homes between July 2007 and July 2008.
Staff from Norwich City Council then moved into the sheltered accommodation.
A letter sent to one of the elderly residents explained that senior members of staff would be moving in.
Head of neighbourhood and strategic housing services, Kristine Reeves, has been suspended on full pay pending the outcome of an internal investigation into the matter.
Council staff have been given notice to vacate the properties by 31 January 2009 ahead of demolition.
Ms Reeves recommended the closure in a report to the city council executive back in March 2007 at a meeting chaired by council leader Steve Morphew.
There was no mention of who was going to live in the vacated bungalows while they awaited demolition.
But two months later one of the residents Vera Day received a letter which read: "Your new neighbours will be senior members of staff from Norwich City Council who have just relocated to Norwich to take up their new positions... They will be living on their own."
A further statement is expected from the council on Thursday.