UPDATE 1-Massive housing relief needed after Sandy as cold sets in

* Displaced to be kept close to home

* New York mayor says 30,000 to 40,000 need housing

NEW YORK, Nov 4 (Reuters) - With freezing temperatures forecast, tens of thousands of people hit by superstorm Sandy need temporary housing, New York officials said on Sunday, but it was not immediately clear where they could all be sheltered.

The number of homes and businesses without power has fallen to 1.9 million from a peak of 8.5 million since Sandy slammed the U.S. East Coast on Monday, authorities said early Sunday.

But nearly 1 million people in New Jersey and almost 730,000 in New York state are still without power, authorities said. Many homes lack heat or were severely damaged by the storm.

``People are in homes that are uninhabitable and it's going to become increasingly clear they are uninhabitable when the temperature drops,'' New York Governor Andrew Cuomo said in a televised news conference. ``Then we're going to have tens of thousands of people that are going to need housing right away.''

Senator Kirsten Gillibrand of New York said that some people might not get power back for a very long time, a concern as temperatures are expected to approach freezing in New York City and even lower in northern suburbs early Monday.

A 71-year-old man died in New Jersey from the cold, state police said Sunday.

``They need to be relocated and we need to find them and find them housing,'' Gillibrand said.

Officials at the news conference did not put an exact figure on the number of people who will need temporary housing.

Immediate plans call for keeping those who have been displaced as near as possible to their homes, but where they will be housed was not immediately clear. There are few hotels in the New York City borough of Staten Island, for example.

New York City Mayor Michael Bloomberg said that 30,000 to 40,000 people will need shelter, with about 20,000 from public housing. But where they will be put up is unclear, he said.

``We don't have a lot of empty housing in this city. It's a problem to find housing. We're not going to let anybody go sleeping in the street,'' Bloomberg said at a separate news conference. ``But it's a challenge and we're working on this as fast as we can.''


The number of displaced people should fall in two weeks to half the high end of the estimate, which was a worst-case estimate calculated by the U.S. Department of Housing and Urban Development based on ``a lot going wrong,'' he said.

Earlier, the mayor urged people to go to local disaster sites.

``If you don't know where to go, stop a cop in the street, they'll help you,'' Bloomberg said.

Craig Fugate, administrator of the Federal Emergency Management Agency, said that 86,000 households have registered for assistance and FEMA has set aside $97 million for help.

The displacement recalls the massive relief effort for people made homeless in the New Orleans area after Hurricane Katrina in 2005.

FEMA has 400 people knocking on doors, but many more are needed, said New York Senator Charles Schumer.

The magnitude of Sandy's damage is still being calculated, let alone its cost. In Suffolk County, on eastern Long Island, 10,000 homes have been inundated, with at least 386 homes having suffered catastrophic damage, said chief deputy county executive Regina Calcaterra in an interview.

``We have areas that are devastated,'' she said.

Suffolk County has begun labeling homes ``red,'' ``yellow'' and ``green'' based on their safety, and is sending electrical inspectors to homes labeled ``yellow,'' Calcaterra said.

Katrina caused more damage than any other single disaster in U.S. history in 2005. About 300,000 homes were destroyed or rendered uninhabitable and 700,000 people were displaced, according to an October 2009 congressional report.