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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.
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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.