Housing definitely helps the working class and mentally healthy people who are trying to work themselves out of homelessness. I fail to see how the housing crisis will help severely mentally ill people with addiction issues, schizophrenia, etc. Such people need long term hospitalization. The de-institutionalization of mental health care was exacerbated by, but did not originate with Reagan. Personally I think it has to do with an over correction against the abuses of early/mid 20th century psychiatry, and the mania for freedom from the 60s onward. A lot of mental health professionals, even in liberal west coast cities, sound downright libertarian when describing patient freedom. The freedom to die in prison or on the streets if you ask me.