In an interview with SBS News, Mr Greenwich explained his rationale.
"What it means is there is a coordinated, whole-of-government approach, to make sure that people who have been affected by a disaster are as best as possible returned to safety," he said.
He said the last time a premier declared a state of emergency was in 2013, in response to the Blue Mountains bushfires.
"And what we saw was a coordinated response, hundreds of volunteers and staff from various government agencies employed to provide outreach and support to get people to safety. People who are homeless should be treated no differently.
"This is a disaster and it's one that we can fix by having the government properly prioritise it."
He said the declaration would immediately mean the government could enhance outreach and repurpose unused government properties to house homeless people.
Mr Greenwich has also started an online petition, which calls homelessness a major health issue.
"Without secure and safe housing, disability, health and mental health conditions degenerate and can't be treated, and new health problems emerge," the petition says.
It adds that "people are at high risk of violence and intimidation and are more likely to enter the criminal justice system".
Census data shows homelessness increased nationally by 14 per cent and rough sleeping by 20 per cent between 2011 and 2016.
Experts have said factors include poverty, domestic violence, the high cost of housing and social welfare payments that cannot keep up with living expenses.
Ms Berejiklian responded to Mr Greenwich on Thursday by calling homelessness a "serious and chronic" problem in NSW.
"We need to be vigilant and keep working to reduce the rate of homelessness... We want to end homelessness by 2030," Ms Berejiklian said.
However, she said the figures Mr Greenwich mentioned in Parliament included people "who have a roof over their head... They may be couch surfing, they may be living in a boarding house... Not all of them are exposed to the elements."
Mr Greenwich called this distinction "problematic".
"If you're in boarding houses or couch surfing or temporary accommodation, you do not have a safe roof over your head. You are still at risk of violence, everything being stolen, [it may be] run down or unstable housing," he said.
"[These people] are homeless. They do not have a safe and secure home."
Alex Greenwich will appear on SBS's Filthy Rich and Homeless next week.