In Manhattan Supreme Court Friday, attorneys for Legal Aid and the City Council argued against a policy that would allow city shelters to impose stricter eligibility rules.

The rules would require single adults applying for shelter prove they have no other place to stay.

Legal Aid attorney Steve Banks said the policy constitutes a new rule and according to the city charter, must be presented to the public prior to implementation. "The city decided that it would attempt to implement this policy without any public debate or public consideration despite the fact that it will have dramatic impact on New Yorkers whether they are homeless or not," he said.

Advocates predict the policy will result in more people sleeping on city streets after being denied shelter in error.

In court, city lawyers argued that the policy is not a new rule and that it has been in effect, though never implemented, for 17 years.

“We’ve had the authority to do this for many years and now we are moving ahead because of the changing nature of the people applying for shelter,” Homeless Services Commissioner Seth Diamond said.

The city maintains that more people applying for shelter have other options — either living with family or friends — and should return to those places, if at all possible. It also estimates that if the rule were implemented roughly 10 percent of all applicants would be found ineligible for shelter, resulting in a savings of roughly $4 million. The annual budget for Homeless Services is roughly $800 million.

If the city wins in court and implements the new rule, Diamond said the city would offer furniture to those willing to take a family member or friend back in.

“This is a modest investment, a couch, an air mattress, something like that,” Diamond said. “That would allow a mother to take her son back.”

These eligibility policies already exist for families that seek city shelter and homeless advocates have long complained that people are forced back into homes where they are not wanted or that are too overcrowded.

Diamond said no one would be asked to return to a place that did not have adequate space.

Judge Judith Gische said it would likely take a month for her to rule on whether the city should have put the policy up for public debate. A second challenge to the policy involves whether it violates a 30-year-old consent decree that requires the city to give shelter to a certain class of individuals.

The city is expected to hold off on implementation of the new policy until at least the first challenge is decided.