An extra $850,000 of funding will be allocated to respond to a spike in the number of people sleeping rough on Melbourne's streets, the Victorian Government has announced.

The funding includes $500,000 to purchase emergency accommodation, and almost $300,000 for an extra 38 beds in a crisis accommodation centre in North Melbourne.

There are almost 250 people currently sleeping rough on the city's streets and parks, an increase of about 100 since the last count two years ago.

Housing Minister Martin Foley said there was no obvious reason for the spike.

"There's never one cause, there's a multiple of causes," he said.

"To be blunt, family violence is the largest driving factor of the increase of demand on homelessness services."

The Victorian Government committed $152 million for crisis accommodation in this year's budget, acting on the recommendations of the Royal Commission into Family Violence.

Minister Foley said he would write to the new federal minister for housing as soon as they were named, to seek their support in responding to the problem.

"Urging them that we re-establish, as a nation, our goal of halving rough sleeping by 2020 and inviting the new minister to join us in that truly constructive effort to put aside partisan politics and deal with the drivers of rough sleeping and homelessness," he said.

Lord Mayor: do not give money to beggars

Service groups said the issue of homelessness and rough sleeping had become more visible as people came closer into the city seeking greater security offered by well-lit streets and regular foot traffic.

Melbourne's Lord Mayor Robert Doyle said it was important to look beyond the symptom and try to address the cause of homelessness.

"There's a young man right now who's down on Flinders Street, he's actually not homeless, he has residential care in Dandenong," he said.

"Problem is, he also has an ice habit.

"So he comes into the city, begs for money, well-meaning but misguided people give him money which he then uses to feed his drug habit.

"We should be caring for that young man in Dandenong, not on Flinders Street, and you don't do that unless you deal with that ice habit that brings him into the city."

People have been camping at Enterprize Park along the Yarra. ( ABC News: Guy Stayner )

Councillor Doyle urged people not to give money to beggars on the street, saying they should instead donate to homeless service groups.

"Hard and fast rule - do not give money to beggars," he said.

"You just know that that money is going to go to feeding that drug habit.

"And so if you give money to beggars, you're not actually helping them out of homelessness, you're entrenching them in it."

The Government and the City of Melbourne will hold a meeting with service agencies next week to discuss the best response to the problem.