After NBC New York reported last week that the Bloomberg administration will require people seeking space in homeless shelters to prove they have no other options, city councilmembers are blasting the policy as "arrogant."
The change goes into effect later this month.
A hearing was called for Wednesday following NBC New York's exclusive story. Department of Homeless Services officials say the policy will save $4 million a year, reserving shelter space for people who truly need it.
City Council Speaker Christine Quinn, who chooses her battles with Mayor Bloomberg carefully, said the new policy "amounts to harassment."
Quinn said she was angry that she found out about this major policy shift, and said the Bloomberg administration never consulted the council.
DHS Commissioner Seth Diamond said 60 percent of the people coming into the single-adult shelters have been living with someone else.
"People who have another housing option are not homeless," Diamond said.
He said the city's shelter system is compassionate and will only turn people away who have a safe place to go, but he did not rule out sending people back to where they came from, including out of state or out of the country.
Diamond insisted the shift is not a cost-cutting move, but admitted it will save money.
"Precious resources need to be reserved for the neediest people," Diamond said.
During a rally on the City Hall steps before the hearing, the Legal Aid Society announced it will ask a State Supreme Court judge on Thursday to block the change.
Quinn and Diamond argued during the hearing about whether the city had obtained "state permission" to move forward with the change next week.
While a New York state office advised the city in writing last week that the policy change does not violate state regulations, aides to Gov. Cuomo deny that Cuomo has endorsed it.