"The message from the state, which is tragic, is we'll pay you for shelter but we won't pay you for rent subsidy, " he said.

WSJ: Homeless Costs Shifted

There are also signs that the rent rises caused by the shift in ownership are pushing up the bill for housing benefit, the rent subsidy paid to poor people.

ECONOMIST: Some councils are getting rid of their entire housing stock

Families have slept at city shelters at an increased pace since a rent subsidy for recently homeless people ended in spring 2011, their numbers rising by 35% since the program's demise eliminated part of the city's social safety net.

WSJ: Homeless Costs Shifted

In 2011, the city canceled a rent-subsidy program, called Advantage, that helped the homeless make the transition from shelters to permanent housing.

WSJ: Mayor Hit on Homelessness

Advocates say the city's problems predate the end of the rent-subsidy program.

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Council Member Annabel Palma, who was homeless herself during the 1990s, said the city should find the funding to create a rent-subsidy program.

WSJ: Mayor Hit on Homelessness

Mr. Bloomberg said the coalition supported the state's decision in 2011 to curtail funding for a rent-subsidy program, called Advantage, that helped homeless people make the transition from shelters to permanent housing.

WSJ: Mayor Hits Shelter Rule

Those with lower levels of housing need could be offered an "affordable" rather than a "social" rent, with a lower rate of government subsidy.

BBC: Social housing budget 'to be cut in half'