People in Dunedin live in fear of a couch fire spreading to nearby houses, according to the city's mayor, Dave Cull.
A couch set on fire in the student flat area of Castle St last night quickly spread to an exterior wall and the house had to be evacuated.
Police said it was lucky that more damage was not done.
Mr Cull said the practice of couch burning was stupid.
"This is what the community has been fearing all along ... sooner or later a couch fire spreads to a house and someone will get hurt or killed.
"The kind of people that light couch fires in these circumstances are not welcome in Dunedin."
Meanwhile, the University of Otago said it had no tolerance for those who lit illegal fires and warned any students caught doing so, would be excluded from the university.
University proctor Dave Miller said students caught lighting fires, or adding fuel to fires, would be excluded from university and were likely to face action by police and the courts.
Mr Miller said it was unclear who lit the fire and he would like any students or visitors who had any information about the incident to contact police or his office.