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The policy would have required single homeless adults to prove they had nowhere else to go when seeking shelter.

In court, the City Council successfully argued that the administration did not give the public enough notice of the change.

The policy put the mayor at odds with City Council Speaker Christine Quinn.

Quinn commended the court's decision, saying it would have put a burden on those who could least handle it.

The Bloomberg administration argued that it had an obligation to find out who really needs the service.

The Department of Homeless Services said it will keep fighting to implement the policy.

"While no court has ruled on the actual merits of the eligibility process, this procedural decision will force the city to build more shelters in neighborhoods throughout the city," Homeless Services Commissioner Seth Diamond said in a statement. "We are confident that city taxpayers and community groups, especially those who object to new shelter proposals, understand the need for a thoughtful approach that fairly reserves shelter for those with no alternatives and we will continue to fight to see that such a policy is implemented."