The housing was advertised on the intranet in July 2007
Norwich City Council advertised low-rent homes meant for the elderly to all its staff through its intranet.
Tenants from Greyhound Opening, which had been earmarked for demolition, were moved out of their homes between July 2007 and July 2008.
Staff from Norwich City Council then moved into the sheltered accommodation and paid reduced rent.
A council spokesman said the chance to rent a home was made to all members of staff on the intranet on 30 July 2007.
The information was released in a statement.
A council inquiry is underway and the council has said it will not be commenting on the matter before the investigation has finished.
Head of neighbourhood and strategic housing services Kristine Reeves has since 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.