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The group, Picture the Homeless is demanding alternatives to Mayor Michael Bloomberg's five-year plan to reduce homelessness.

In its report, the group says the plan to cut homelessness in the city by two-thirds by the end of this year has failed – with the number of families with children entering city shelters on the rise.

The group surveyed 500 homeless New Yorkers from all five boroughs over an 18-month period beginning in 2007. Of those interviewed, 69 percent say they've been to housing court because of a subsidy-related issue, making it harder for them to leave the shelter system and find real housing.

The group says homelessness must be ended, not managed.

"This city currently has to think differently about how they put money toward homelessness," said Rob Robinson of Picture the Homeless. "Currently the Department of Homeless Services spends about $750 million a year to temporarily house people. That makes no sense. They have to start thinking differently and take some of that and start making permanent house for people to keep them out of shelters."

The Department of Homeless Services says the city's program, Advantage New York, has helped nearly 12,000 households sign leases since it started in April 2007, outpacing previous rental assistance programs.