Torronto is a perfect example. It was merged into Greater Torronto, and those new areas are what led to Trumpist style Rob Ford being elected.
And its also zoning. Its always surprising to me how in the US people don't live in the cities. In Europe, the city center are very lived in. The downtown can't turn into a ghost town, even if everybody works from home.
UK being an exception, sadly. Which is understandable, considering they basically invented the "suburb" concept and then exported it to the colonies.
I live near Manchester, I know, but the city centre is still nowhere as dense (in terms of dwellings) as most towns and cities on the continent. It's changed for sure - lots of old warehouses and factories have turned into flats - but the city has clearly been built for business activity first and foremost. And as soon as you move to smaller towns, like Warrington, the number of people actually sleeping in the immediate town centre falls to almost zero. Brits just want to live in suburbia and in the countryside.
Portland is the only city in the country that is taking as aggressive an approach towards decriminalizing and formalizing encampments, and it shouldn't be surprising that it is experiencing visible failures this early on, or an indictment of those policies.
Who the hell wants "formalized encampments"?! We going to turn our cities into third-world-style shanty towns now like you can find on the outskirts of Nairobi?
If you really want to destroy a city, I can't think of a better way to do it than going down this path.
I mean, it sounds like what you have now is worse. If your city is going to have an underclass either way, a formal shanty town seems less bad than a homeless encampment.