People living on the streets have been told by authorities they may no longer be allowed to sleep rough as NSW's peak homelessness body fears the vulnerable could face police action if the state drags its heels on offers from hotels.

Homelessness NSW chief executive Katherine McKernan said many of Sydney's homeless people were still without shelter and risking COVID-19 transmission due to a lack of co-ordination from government departments, despite hotel chains reaching out to offer their spare rooms.

Struggling Sydneysiders line up for a free lunch outside Matthew Talbot Hostel in Woolloomooloo. Credit:Janie Barrett

And while rough sleepers are exempt from the public health order to enforce social isolation, Ms McKernan said a car window washer being fined by police at an intersection on Wednesday indicated vulnerable people could be unfairly impacted.

"A man fined for washing car windows is very concerning. People experiencing homelessness often wash car windows to earn money to survive," Ms McKernan said.