Some 500 homes in the Mystic Island section of Little Egg Harbor Township are so badly damaged they may not be inhabitable, Mayor John Kem said.
The waterfront community in southern Ocean County was one of the hardest hit sections in the township.
Kehm said it is possible that residents will not be able to return to their homes.
"This is a Waterfront community and a lot of residents are year round," Kehm said."Some are snowbirds and they go south for the winter but a lot of these homes are people's only homes."
Many electric meters and wires have been compromised by water in the storm. Power is still out in portions of the township, but continues to be restored.
"A lot of people are turning power back on and there have been fires down here. We've had some over on Susquehanna Drive already. You can't go in there and think you can dry it off a little and just turn it back on. The wires and meters have been compromised by water," he said.