As others noted it is not a simple problem, but mostly from an ethical perspective, but at the same time it is also not a one-dimensional problem and some of the dimensions are not at all complicated.... addiction, chosen lifestyle, mental illness or a combo.... I lived and worked downtown for a couple of decades give or take. I talked, interacted and observed, this is my experience.... Sorry for the long read...
Group 1: I saw the same people in this group everyday, in the morning begging for money with sob stories about needing money for food, shelter, bus tickets, etc. Some used a dog or a cat as a prop. Same type of people at off ramps etc. Territorial about their spot. On the way home I saw the same people wasted out of their minds. Most (not all, next categories...) had a change of clothes, each day, fairly clean, did not smell, etc. Most would also get mad if you offered to buy them food.... or if you did they just tossed it. They mostly had a place to go.... collecting welfare or ODSP, then when you do the math, if they get $15 an hour (likely much more) tax free in cash that sets them up for the afternoons activities "working" four hours a day, no boss... party time. Eventually they move to the next groups...
Group 1.5: Like group one but now in ever increasing tent "escapements", may or may not be collecting gov funds. Still pretty clean... but they still have the wherewithal to work the system but not work, "high functioning" addicts or mental illness.... Ethical issues like group 2 below but not as serious...
Group 2: Then you have the people really sleeping rough on subway grates etc. or using shelters. Filthy and you can smell them... Well more times than not it is serious low functioning addiction or mental illness (or both), same people day in and day out. This one is tricky, how to help someone that really can't or does not want help themselves? Is it ethical to enable them? Is it ethical to leave them suffering on the street? Is it ethical to to institutionalize them? Really none of the three are actually ethical, that is the complicated part. It appears that many believe the least worst approach is to reduce suffering, but that typically heavily overlaps the first unethical point (enable).
Group 3: This IME is the absolute minority but the person most want to believe is the vast majority. They had a life changing financial event that put them there or addition put them there and they beat it (went from group 1 or 1.5 and beat it). They will typically not be there for long as they REALLY don't want to be there and any help they get they use to get out of the situation. Society looks back to events like the Great Depression and wants to believe that is what is going on, that is not today.
Other than Group 3 it is a combination of lifestyle, addiction and mental illness, enabling them to go go deeper and migrate from group one to eventually Group 2 is unethical. Opioid addition has been a big factor in the slide but it is not the only factor.
The worst group though is Group 4, the dogooders that do nothing but enable them to slide deeper. Then protest when encampments come down but at the same time do not take anyone home to help them.... how dare you take down that encampment, no way they can come live in my yard or with me.... Solution to the problem, enable but NIMBY. I bet they also feed bears and coyotes....