During the formation of tissues, cells organize collectively by cell division and apoptosis. The multicellular dynamics of such systems is influenced by mechanical conditions and can give rise to cell rearrangements and movements. We develop a continuum description of tissue dynamics, which describes the stress distribution and the cell flow field on large scales. In the absence of division and apoptosis, we consider the tissue to behave as an elastic solid. Cell division and apoptosis introduce stress sources that, in general, are anisotropic. By combining cell number balance with dynamic equations for the stress source, we show that the tissue effectively behaves as a viscoelastic fluid with a relaxation time set by the rates of division and apoptosis. If the system is confined in a fixed volume, it reaches a homeostatic state in which division and apoptosis balance. In this state, cells undergo a diffusive random motion driven by the stochasticity of division and apoptosis. We calculate the expression for the effective diffusion coefficient as a function of the tissue parameters and compare our results concerning both diffusion and viscosity to simulations of multicellular systems using dissipative particle dynamics.