If the goal is to move our cities in the direction of prosperity, we cannot accomplish it when a portion of our population is homeless. Government subsidies and temporary shelters are not a lasting solution to this issue, but affordable housing can be.
We accomplish this goal over the long term by allowing for greater housing flexibility, adaptability and options. Zoning laws should be adjusted to once again allow for small housing options like micro apartments, tiny homes, accessory dwelling units (ADUs) and single-room occupancies (SROs)—all of which used to be permitted and present in most cities across North America. Occupancy restrictions which limit the amount of people who can reside in a given dwelling should also be relaxed.
In general, greater housing flexibility will enable more people to live affordably in the neighborhoods of their choosing, which will ease up on the financial pressures that limit access for people with lower incomes. The majority of homeless people are in a temporary situation of housing loss due to income or circumstances related to poverty (and a small portion are "chronically homeless" because of physical and/or mental disability).
We must build our cities in a way that does not squander precious, desirable land for low-value uses like parking and big box stores, but instead puts that land to its fullest purpose. Doing so will not only create more housing options and affordability, it will also build up a stronger tax base to provide for the portion of unhoused people who truly need ongoing supportive services.