During summer they settle into the city's crevices, beneath bridges and awnings, nestle into doorways and even sleep below NSW Premier Mike Baird's conference room, in the shadow of the highest office in the state.

The City of Sydney's biannual street count recorded its highest numbers of rough sleepers last year; 486 people were counted in the summer census and 394 in winter.

The ever increasing numbers of homeless people are being forced to spread out across the CBD, camping in doorways, tunnels and parks.

One group, loosely organised by a founder of the Occupy movement, has established a regular camp beneath a Martin Place development that bills itself as "Sydney's most prestigious new address".

Lanz Priestley set up the camp a few hundred metres from the site of one of the world's longest running Occupy sit-ins, to provide a safe place for women after he became aware in the week before Christmas that many were being assaulted on the street.

He was already running a dinner service for those homeless in Martin Place.

"Then this came along and I thought, why not take it 24/7?" Mr Priestley said.

Mr Baird said NSW was spending $188 million on specialist homeless services this year. The Department of Family and Community Services was helping people in the CBD to find immediate accommodation and address their long-term needs.

"Despite our efforts, it is strikingly apparent that many people are homeless and sleeping rough on the streets of Sydney and around our state," Mr Baird said.

"It is clear there is still more to do and we are continuing to work with the City of Sydney council to ensure everything possible is being done to help those in need."

The Occupy movement, which sprang from disenchantment with wealth inequality, maintained a presence in Sydney's Martin Place for three years. During this time it spawned many spin-off campaigns and Mr Priestley became the bete noire of the authorities.

Mr Priestley was charged with failing to comply with a council notice that prohibited people from "staying overnight" in the area, but defeated it as a result of the flaky definition of "overnight" and because he was under the awning of the Channel Seven building and therefore, not on public land.

The Director of Public Prosecutions appealed up to the NSW Court of Appeal but was ultimately unsuccessful, and Mr Priestley is sanguine about his chances of prosecution again.

A City of Sydney spokeswoman said the homelessness unit had found tents, large piles of clothing and cooking items in Martin Place and was monitoring the current situation.

Its rangers removed some gas canisters from the site on December 23.

"Homelessness is not illegal," the spokeswoman said.

"However, cooking on open flames and tents are not permitted in Martin Place. Public health and safety remains the City's primary concern in responding to this situation."

About 38 people have been sleeping under the awning at 60 Martin Place, where food is provided courtesy of restaurants and food malls that have agreed to donate items at the end of their shelf life, and a common book collection is available for entertainment.

Mr Priestley said finding long-term solutions to homelessness by making housing more affordable was key.

"For me, this is the beginning of a discussion," he said.

"I'm over waiting for government to do something because everything they do exacerbates the problem."

Social Housing Minister Brad Hazzard, who visited the site on Thursday, said the government had produced more housing than had been built in the previous five decades, but supply was not the only factor in solving the problem.

The department had offered emergency accommodation to all the people in Martin Place, but only person, a pregnant woman, had taken up the offer.

"Whenever there's an individual or large groups of people that gather I get the department and NGOs to go and chat to the people and see if they will accept temporary accommodation and services for whatever caused their homelessness," Mr Hazzard said.

Pop-up shops in Sydney parks had found beds for 300 people in the past 18 months, he said.

"We're doing everything we can, working with the City of Sydney who have been taking a fair share of the load," Mr Hazzard said. "It's never ever going to be completely solved in a major city that has a social conscience because the harder you try and make things better, sometimes it just attracts more people because they know there's support there."

Homelessness NSW chief executive Katherine McKernan​ said the figures recorded in the City of Sydney's rough sleeper counts reflected housing policy, improving during 2012 and 2013 with programs that provided long-term housing with social support, but rising again as those filled up.

"It was bad before then and it's become bad again, and the reason for that is the lack of social housing and the increase in the cost of private rental accommodation in NSW," Ms McKernan said.

Homelessness NSW is campaigning for 30 per cent of housing in new developments to be designated as affordable housing.

"If we address the housing issue we don't need to invest as much in the crisis system," she said.

International evidence shows people who are chronically homeless quickly return to the streets if they are not also provided with support when accommodation is found for them.

Mr Priestley said the Martin Place group had not accepted Mr Hazzard's offer of accommodation because it was only short term.

The only person to have accepted the offer was back in the camp on Thursday night.

The 20-year-old, who did not want her name published as she did not want her family to find her, said it was her fifth stint on the street in the past 12 months and she had been assaulted many times; she had often woken to find people interfering with her. The assaults had not happened in Sydney and she had not reported any of the incidents to police.

The woman, who is three months pregnant, said she accepted the accommodation because she did not want to give the authorities a reason to take the baby away as they had with her first child.

"But I came back down here to help because it was habit," she said.

Another Martin Place resident, Mary Myers, 57, has bipolar disorder and has also struggled in conventional housing. She only lasted a week in accommodation that was found for her last year, though she continues to pay for it.

"For me it's not about the bills," Ms Myers said. "I've got the pension and I can afford to do that. It was like being thrown in a little cell to die. No support.

"I'm going to cry."

Light in the tunnel

Rough sleepers, Conor and Chad beneath the viaduct at Wentworth Park in Glebe. Picture: James Brickwood. 

Irish national 19-year-old Conor arrived in Australia six months ago and is living in the tunnels beneath the light rail bridge at Wentworth Park despite working as a labourer.

"I just got up on my feet now; I have a full-time job," he said. "I'm a labourer for brickies. It's good work."

While many people would consider living in a park as a last option, Conor said he was loving it.

"There's choices for everything," he said. "I had to get away from all the hustle. "It's a lifetime opportunity, to have the balls to do it and be happy doing it."

And he feels he's learning about life while there.

"I'm a young man. This is a school to me, I'm at school, learning their ways and I've learnt a lot."

Conor shares a tunnel with 37-year-old Chad who, up until recently, lived in Bronte in Sydney's eastern suburbs.

Chad has been living in the tunnels for three months while he gets back on his feet but says there are times he doesn't want to leave.

"It's interesting; it's the only time I've lived rough," he said. "It's been good getting some time out. It's almost like I'm getting too comfortable now."

Living in Wentworth Park means he can access amenities, receive food and live away from the crowded streets further east.

"We're here paying nothing, we get fed every night," Chad said. "I was seeing guys getting offered houses and they're back here a week later."

He said the people living in the park were conscious not to annoy other people using the area.

"We call it a tent embassy; there's a bit of a code," Chad said.

A rough sleeper John beneath the viaduct at Wentworth Park in Glebe. Picture: James Brickwood

"This isn't Australia any more' this is 'lost-ralia'," he said. "The country has become overpopulated in relation to the amount of bedrooms you have."

John said for people living off unemployment benefits, living in a house in Sydney was almost impossible.

He said even people living in the most basic accommodation still had only $250 to survive on over a fortnight.

Despite his circumstances, John said he was thankful to live in Wentworth Park.

"Everyone wants to come here because it's a wonderful existence," he said. "They want to come down here to get away from the nonsense. This is a peaceful place."

Homeless Camps at Wentworth Park. Picture: Christopher Pearce 

David*  has also lived at Wentworth Park for a year.

"I had an accident at work and [there were] financial difficulties," he said, adding mental health issues had also added to his problems.

Living on the streets has taken a toll for David, who has had breakdowns in several relationships.

"Once you come to this, you start losing contact with your family and your friends," he said. "It changes your whole lifestyle."

He said the tunnels were a great place to be, and the council was looking after the little community that had emerged.

"What's brought us here is all different," David said. "All of us look after ourselves."

*Not his real name