A plan to build a homeless shelter in Melbourne's CBD could spark a struggle between peak homelessness bodies.

A plan to build a homeless shelter in Melbourne's CBD could spark a struggle between peak homelessness bodies. Photo: Karleen Minney

A plan to build a homeless shelter in the CBD could spark a struggle between Melbourne's peak homelessness bodies over which vulnerable people are most in need.

At least six organisations will meet Melbourne City Council next week to discuss a proposal to build a minimum 12-bed facility in the city, to offer 24-hour shelter from the hot and cold.

Councillor Richard Foster said the centre could be open by the end of the year, costing the council $1 million to $1.5 million or more to build. He said some of the ongoing costs of running the refuge, which would include health and other services, could be subsidised by government or philanthropy.

"I'm keen to keep the ongoing budget burden to the City of Melbourne to a minimum, but I think it's time the City of Melbourne realised that a substantial problem like homelessness requires a substantial response."

Cr Foster said he was confident the proposed shelter could cater for most and would not put groups in competition.

“It may be that we have a small facility with a small number of beds to address some needs and a bigger facility elsewhere,” he said.

He said council was restricted to addressing the results of homelessness within the municipality’s boundaries.

“Addressing the cause requires state and federal responsibility.’’

However some have already questioned if the money would be better spent on more permanent housing solutions.

Sarah Toohey, from the Council to Homeless Persons, said: "A refuge can provide temporary safety and respite, but if it's not backed up by solutions to end homelessness, people are forced back to sleeping outside."

Meanwhile, debate is brewing over whether the centre would best target young people, chronic rough-sleepers or women.

Melbourne City Mission wants to build the first 24-hour youth refugee in the CBD with the help of the council.

The manager of the group's youth arm said it already had the wrap-around services at its King Street base to complement the shelter, including Centrelink and parenting programs.

Wayne Merritt said some teenagers ended up sleeping rough, renting rooms in boarding houses or walking around the city at night when youth refugees were full.

He said if they could get young people real help when they first turned up at crisis centres it could prevent them from spiralling into a life of homelessness.

"We can't cure everything and save everyone but it is another brick in the wall to help reducing the impact of homelessness."

McAuley Community Services for Women was less convinced a shelter was the best option. Chief executive Jocelyn Bignold worried the media attention on the recent death of a homeless man had resulted in a focus on rough-sleepers at the expense of the majority of homeless people.

She said most of their female clients did not sleep on the streets. "In Victoria at last count there were 9800 women that were homeless, and of those there were 300 that were considered to be sleeping rough.''

However Salvation Army Major Brendan Nottle does not believe there is a bias towards rough sleepers and supports an overnight shelter as a stepping stone to permanent housing.

"People have a focus on a particular area of homelessness so they're obviously going to see the need in a particular space. But at the end of the day we have a very vulnerable group who are sleeping in the streets of the city who need to be protected."