NEW YORK, NY December 24, 2008 —Mayor Bloomberg is downplaying a report that the number of homeless families entering shelters is at its highest in 25 years.

REPORTER: The report from the Coalition for the Homeless says nearly 10 thousand families are using city shelters, a sharp increase from last year. Advocates say it's a sign that the city's efforts to reduce homelessness aren't working, but the mayor says the city can manage the surge.

BLOOMBERG: Some advocates just desperately don't want things to succeed. If you remember 7 years ago, people were sleeping on benches. They literally were being bussed all night long to find a bed for them. Today, nobody sleeps on a bench overnight.

REPORTER: Homeless advocates warn that state budget cuts will harm the city's eviction prevention programs.