Louis Kryminski, 56, was living in his shed for about a month. (CBC)Winnipeg Mayor Sam Katz says he is disgusted that homeless people in Winnipeg are living in utility sheds.

This week, CBC News reported that a St. Boniface man was renting out two sheds on his property to a man and a woman.

The homeowner, Charlie Warman, was fined $275 by the Manitoba Health Department on Monday. Inspectors who visited his property on Horace Street told him the insulated sheds were too small.

Warman, who was charging $100 a month for each of the sheds, said he was just trying to help homeless people who can't afford to pay for an apartment.

Katz called the practice a violation of the city's health and safety codes, and further proof that Winnipeg needs transitional housing that would provide safe and legal places for people to stay.

Debbie Peachy, 43, said the shed was perfect for her but now she will be forced back on the street. (CBC)"I'm disgusted that people have to do that," Katz said. "I'm also disgusted we have street people, but we do have people live on the streets and I'm also extremely disappointed that there are people in our community who would try to take advantage of these people."

But the people who were renting Warman's sheds — Debbie Peachy, 43, and Louis Kryminski, 56 — said the shelter is clean and warm and provides privacy that crowded homeless shelters cannot.

Peachy also said the money she gets from welfare isn't enough to afford an apartment that doesn't have bedbugs.

She and Kryminski were given 48 hours on Monday to move out, but have remained while provincial officials try to find them an affordable place to go.

Katz insists the sheds are an unacceptable form of housing.

"When it comes to housing, there are many codes that have to be maintained. I can assure you that these codes are not being maintained," he said, identifying those codes as "access, egress, whatever the case may be."

"I also believe that if I were to ask you if it's okay for two people to live in my garage, you might say, 'Sam, I don't think that's appropriate.' And I would agree with you."

The mayor said he has been talking with officials from Siloam Mission about establishing transitional housing.

A spokesman for the mayor said later Wednesday that the decision to shut down the sheds was made by the provincial health department and not the city. As well, Manitoba Housing is a provincial, not municipal portfolio.