I think around 1986 Reagan cut the federal funding to the facilities that would house the mentally ill. This created the homeless situation in the USA. I remember the term homeless as newly formed at that time and remember the population exploding as I went through college in center city Philadelphia.
The homeless situation as we know it had multiple causes in the 80s and prior. Part of it was Reagan-era policies wanting to save money, but the other half (which in my view would have probably still "achieved" the same end result) was activists who argued that involuntary institutionalization violated the rights of those who were committed. "The Left" and "The Right" were full partners in dismantling what we had. In my opinion, both were too stupid to realize the consequences of just deleting what existed without having a realistic plan for how to deal with those people. It's like if you realized your water heater was consuming $30 worth of electricity every month so you just turn the breaker off and say "We saved $30 and improved our climate footprint" but now everyone has to take cold showers forever and the dishes don't get properly cleaned.
There was always a population that preferred living on the margins of society. Hobo’s and tramps are different than the mentally ill and they were called hobos and tramps. My grandmother used to trade food for labor of these people as they passed through.
The homeless were people that could not care for themselves or be of use in some way. The grey area might be junkies.
