Go figure.
But you can't build things like that anymore; you get shut down if you're not meeting all the "minimum requirements" and so the people who at least used to have a heated room out of the weather are now living rough.
As an aside, they are perfectly good neighbors. As is the studio apartment complex next to it, that is a single tier above the SRO. I have a lot more trouble from the fast food wing place on the other side of the block than I've ever had from my neighbors.
You should be more concerned about general restrictions on housing construction. Mental health is not magically better in Japan and yet we don't see this kind of vagrancy there. But they also don't have the kind of nimbyism that plagues American cities with "intractable" homelessness problems.
As a Chicagoan though I’m much more concerned about mental health and access to short term housing. We’ve eliminated almost all of the short term housing that helps people move off the streets with the obvious side effect of homeless encampments. But you very rarely hear any talk of easing the restrictions on short term housing.