The problem isn't with high-density affordable housing but with building housing that segregates people based on income level. High-density development is a good thing generally and makes a neighborhood more varied and vibrant in my view.

The problem comes from concentrating poverty into a single location. Instead, the United States should spread it out evenly with affordable housing throughout our cities and neighborhoods. The development patterns in the United States end up with two extremes: single family houses or large apartment blocks, with nothing in between (the missing middle problem). There is a lot of implicit segregation by income there, even at the single family housing level, since different housing developments tend to build roughly the same size house repeatedly in any given development. Rather than building neighborhoods where everyone has roughly the same income level, as the United States does now, it would be better to build neighborhoods that can accept people of all income levels. That way, the problems associated with poverty and similar issues are diluted throughout a city and never concentrated.

American local governments go out of their way to do everything as if they’re the only ones facing an issue, and I think solving that tendency in American governance is likely way harder than solving anything in the homelessness space.

Even outside of that there are very large downsides for local governments to handle such issues because any successful system would likely attract more people from other parts of the country which would put an even greater financial burden on local taxpayers. Considering cities are cutting services like libraries, etc. it’s a huge disincentive for any local government to enact an actual effective solution.