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I have no idea why Japan has almost no homelessness, but how sure are you that it's because housing is cheap? While many temporarily homeless are really homeless because rent is too high and incredibly cheap living arrangements aren't available, the mentally ill or drug-addicted homeless might not hold an apartment at $100/mo, or might get kicked out of one. And even though the 'temporarily homeless due to cost of living' outnumber the addicts when you count by 'have you ever been homeless' on a population basis, the latter are less likely to climb out of homelessness, and are much more of the homeless population at any point in time. Compare it to Japan's low crime rate. (Although low rent is good even w/o affecting homelessness ofc)
Housing and mental illness and drug addiction are all very complex, and I'm not super confident in this hypothesis. But I think there's a good case to be made that making housing cheaper will reduce homelessness significantly. There are a lot of people who are borderline unable to care for themselves, where in good circumstances they do well enough, but in bad circumstances they'll totally collapse. You can take a person, and if they have a roof over their head and their own toilet, they'll be able to hold down a job at McDonald's, or doing landscaping, or some other straight forward job. But take away that roof over their head, their life becomes harder enough that they're unable to hold down any job, and they spiral. They turn to drugs to get any semblance of happiness, or maybe because all the other homeless people who become their de facto social circle use drugs. And expensive housing turns them from transitory homeless to a blight on society.
I think Scott's post here makes a good case about cheaper housing being very good good even if it's not the main point of the post: https://astralcodexten.substack.com/p/book-review-san-fransicko
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