Gerald, Your plan sounds a lot like what's happening in Copenhagen in a little village called Christiania... http://en.wikipedia.org/wiki/Freetown_Christiania
I lived in Copenhagen for a while and it was a really neat place...
Funny how you think we should adopt strict substance policies for housing. You know that won't work and will only force people to feel more ostracisized, vitimized, and take away their liberty under the constitution. I say let them do whatever hey want. Have you ever researched the happiest country on earth, Denmark, and how they treat this problem? Ever heard of Christiania in downtown Copenhagen? It's a small community that's a model for civility and appropriateness in dealing with people in that kind of need. Do some research and get back to me.