The Director of the Dublin Region Homeless Executive has said the situation where homeless families stayed in garda stations on Tuesday night was "exceptional".
Up to 12 homeless families in Dublin were directed to garda stations as there was no emergency accommodation available to them.
The Department of Housing said it is aware of "capacity issues".
Speaking on RTÉ's Drivetime, Eileen Gleeson said that providing accommodation for families every night is "tight", but there were extenuating circumstances on Tuesday night.
Ms Gleeson said additional contingency beds have been added to deal with situation where families arrive seeking accommodation late in the evening.
She said there are always contingency beds available, but contingency accommodation is available only for people who may not have previously presented as homeless.
She added that if hotel rooms are fully booked with paying customers, it could mean that the rooms are unavailable for homeless families.
Tánaiste Frances Fitzgerald has told the Dáil it was "unacceptable" that homeless families stayed in garda stations on Tuesday night and "quite clearly garda stations are not suitable places" for families to be sent to.
Fianna Fáil's Barry Cowen asked Ms Fitzgerald about the housing crisis during Leaders' Questions .
He questioned the way some homeless families spent the night in garda stations on Tuesday and noted that Mike Allen of Focus Ireland said what happened was "unprecedented and shocking".
He pointed out that one-in-three homeless people are children.
He said the tourist season means hotels are getting busy and this will add pressure to the housing situation.
Mr Cowen asked what the Government is doing to seek emergency accommodation when hotels are sold out.
Ms Fitzgerald said that the DRHE is responsible for homeless agencies and she said that what happened on Tuesday night is "unacceptable" and the demand was out of the ordinary.
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She explained there are additional contingency units and last night only one of them was needed.
Figures will be published later today to show that the numbers of families in hotels has reduced, she said.
Mr Cowen said it is damning indictment on Taoiseach Enda Kenny and his Government that the situation is worse and the crisis has got worse.
He said that it is near time after a year in office that the Government concentrates on the job at hand and bring focus to bear on all the sentiment that has been expressed within Fine Gael in recent weeks.
Ms Fitzgerald said that she accepts there is an extraordinarily big challenge out there in terms of housing supply.
She said that nine months into the Rebuilding Ireland programme there are strong indications that the plan is starting to work.
Housing and homeless charity Focus Ireland said there is currently a "critical shortage of suitable family emergency accommodation" with over 800 families staying in hotels in the capital.
Up to 200 of these placements are night-by-night bookings so if a hotel is full, a homeless family has to find another place to stay.
On Tuesday night, accommodation could not be found for reportedly up to 12 families.
Focus Ireland has described this as unprecedented.
Sinn Féin's Housing Spokesman Eoin Ó Broin called on the Government to release emergency funds to allow local authorities to purchase homes and ensure no child is in emergency accommodation longer than six months.
He told the Tánaiste that child homelessness had increased by 20%, that there were 183,000 vacant homes, with 43,000 in Dublin.
He said this was Mr Kenny's legacy: "He put the rights of the child in the Constitution, and put children into emergency accommodation".
Homeless families afraid children will be taken into care
Focus Ireland Director of Advocacy Mike Allen said that some families did not go to gardaí because they were afraid that their children would be taken into care, and some of the families slept outdoors.
Speaking on RTÉ's Morning Ireland, Mr Allen said it is very rare that even one family is left without accommodation and this was the highest number he has ever experienced.
He said there must be a clear statutory responsibility that no family sleeps rough.
Mr Allen said that more emergency accommodation and family hubs will come onstream over the coming months, but he did not believe that was the way forward.
He added that other cities who have gone down this route have found it expensive and unproductive.
The focus should, he said, be on preventing homelessness in the first place.
In a statement, DRHE said a protocol is in place, whereby if accommodation cannot be sourced late at night, families are directed by Focus Ireland to garda stations for their safety.
However, a spokesperson for the Garda said that no homeless family stayed in a garda station two nights ago. It is unclear where the families spent the night.
The homeless executive also said that last night it has "more than doubled the volume of emergency contingency capacity" that is available to homeless families.
Woman describes desperate search for accommodation
A woman whose family was unable to get accommodation on Tuesday night has said the situation is heartbreaking.
Speaking on RTÉ's Today with Sean O'Rourke, Cheryl Barnwell said that this is no way for families to live and the proposed family hubs are not sufficient because they are just hotels, with the hotel name removed.
She said that everyone should have their own home and privacy.
Ms Barnwell said that she has worked since she was 14 years old and explained that her family became homeless seven-and-a-half months ago after her landlord decided to stop renting to Dublin City Council tenants.
Until then, she said, she had worked full-time and she and her partner had paid the equivalent of a mortgage in rent.
She said she had to give up her job because it is too difficult to do everything while also searching for accommodation on a daily basis.
She said she rang around 40 hotels and B&Bs between 9am and 6pm on Tuesday and then rang the Dublin City Council self-accommodation line, who advised her to contact Focus Ireland, who in turn advised her to attend a garda station.
Ms Barnwell said she later went to a garda station where she was told that, unless they were arrested, they could not sleep in a cell.
She said the family stayed in their car until midnight, when they received a text from the head of Inner City Helping Homeless.
She, her partner and two sons then spent the night in the charity's office.
Chief Executive of Inner City Helping Homeless Anthony Flynn said Tuesday night was one of the worse he has seen in four years of homeless services.
Mr Flynn, who put Ms Barnwell and her family up in his office, said he rang over 55 hotels between midnight and 1.30am and not one was able to accommodate the family.
Speaking on the same programme, he said the family hubs, proposed by Minister for Housing Simon Coveney, is a recategorisation of hotel accommodation and described it as a "whitewash".
The time and effort being spent on sourcing these hubs, he said, could be spent sourcing houses and apartments for families.