On the contrary, the prevalence of mental illness and other issues in the population is much higher than 1 in 500 (probably 10x that rate, at least), so while y

On the contrary, the prevalence of mental illness and other issues in the population is much higher than 1 in 500 (probably 10x that rate, at least), so while you think this number is high, I don't think it's crazy at all. Many of these people would probably have been forcibly institutionalized in the past (which some people think is better, and others think is worse). If we forcibly institutionalized the homeless, we would have zero homelessness overnight (but would that necessarily be better?). So judging simply from the numbers can be misleading. However, the trend of homelessness going up 12% year over year is a real issue, though the proper comparison point would probably be 2019 since there has been a lot of government intervention to artificially lower homelessness over the past couple of years (which might be long-term unsustainable given the budget deficits).