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You mentioned that helping the homeless was a big part of your earlier life and faith.
Something I heard from a researcher is homelessness is actually two problems not one. There is the housing side: these tend to be people who got evicted, escaping domestic abuse, or some other temporary situation and really what they need is temporary housing---but with enough support, they can get back on their own feet.
Then there is the mental health side (whcih is also related to substance abuse). These are fewer in number of people, but they make up the bulk of the "homeless-days" (i.e. days a person spends in a state of homelessness). The chronically homeless, if you will. These people probably won't get back on their feet on their own, and would need enormous help to do so if it's even possible.
It's really two different problems with two different sets of needs and solutions.
The temporary homeless is, in my mind, an easier problem to deal with. More shelter beds, safe shelter beds. How to deal with the mentally ill and chronic substance abusers is a real societal challenge. I'd want to ask how people fall into that state to begin with, and try to nip it in the bud.
Our town actually has retrofitted a bunch of old school portables into temporary housing units for the first category of people you reference. People who are temporarily unhoused for 1-3 months. It's not a bad solution although I am not sure how scalable it is. It works for a town of 30k people that doesn't really have much of a homeless issue (although there are some). I don't know if it would work for a city. I do like the idea of trying to keep these two different types of homeless people separate. I remember reading that in Toronto a number of homeless people were refusing to use shelters because the conditions were so bad and dangerous.
I don't question the intent. I do question the fact that they thought handing out needles and crack pipes to junkies would end up any other way.
I worked at a building like this in 2013 in Vancouver. The goal was to provide housing for people who otherwise were so mentally ill that they were the 0.5% of chronically homeless costing the city some huge chunk of its homeless budget.
People thought it could end up being cheaper than housing such people in jail (which is stupidly expensive -- although, not hard to imagine why) or in asylums.
It was a lot of chaos. There was one crazy guy who kept trying to boil gasoline on his stove top.
There is a group of people who are so batshit insane that there is no easy answer to how to live with them. If you commit them to asylums, the asylums end up costing as much as the other solutions (probably more) and you have the problem of where you draw the line of "committing" someone and saying they are too insane to have freedom. I knew several men who were committed at different times of their lives and had very strong feelings about the injustice of it. While I knew them, they weren't too crazy, but I did have the sense that they would be capable of some pretty outrageous behavior given the right circumstances.
Or you can wait till they break a law and then send them to jail. Problem with this is that often they break very tiny laws which don't carry long maximum sentences. So then they become a heavy bleed on the city.
Before working in Vancouver, I lived in a smaller Pacific NW town, and there were about 20 individuals who had been homeless there for years, but who were costing the city insane amounts of money largely through petty stuff like public urination or calling ambulances when they did something stupid. Hospitals don't usually turn emergency cases away, and so someone has to pay for all that care.
I don't know anything about Luugat other than what you posted here and the article, but I think it's a reasonable attempt to find the best solution to the hard problem of insanity.