Looked-after youngsters are being sent up to 200 miles from Cardiff to Liverpool for care, a council has said.
An inquiry into out-of-county placements showed 244 of 800 cared-for children are based outside of the city.
As a result a Cardiff Council scrutiny committee has suggested building new children’s homes.
A council spokesman said 80% are within a 20-mile radius, with parents addresses and foster families accounting for those further afield.
The committee’s chairman Lee Bridgeman said some youngsters are being sent to Liverpool, the north of England and north Wales.
“There are young people we understand need to go out of county, for example in cases of sexual exploitation,” he said.
“But in general, the first port of call is if they can be placed in Cardiff, wouldn’t it be great if we can have them here?
“We need to reopen children’s homes but they have to look different to what they were. We have to incorporate them into the community.”
On July 21 last year, 155 of the 244 children in placements outside Cardiff were with agency foster carers, while 38 were in children’s homes.
Others were with relatives, friends, parents, guardians, or at residential schools, while six were in either at a youth offender institution or a prison.
Cabinet member for children and families Graham Hinchey said the council’s leadership requested the inquiry to “explore every possible way of maximising the number of our looked after children we place in Cardiff”.
He said: “The children living more than 20 miles from Cardiff will be in those locations for a number of reasons, and it is important to recognise the circumstances involved.
“For example, they could have moved away to live with their parents or another relative.
“Some may have chosen an independent living setting in that area, so they can stay close to their foster carers.”
The council’s cabinet will now consider the recommendations made in the report before deciding what actions to take.
One involves considering building new children’s homes within the next year, and another is the possibility of the boys-only Greenhill Special School admitting girls.
The council will also consider new strategies to recruit and retain social workers.