I know a guy here in Florida who spent two years living in his car. He actually rented my basement for a while when I lived in NY, but refused to move and rent my basement when I had to move to NH for a job (though, I offered). He went back to Florida, annoyed everyone he knew, and ended up in his car for two years. When I moved back to Florida, I helped him get a cheap mobile home. It's a piece of crap, but better than living in a car. He said it was pretty harrowing, sometimes, and he spent most of his time in Wal-Mart parking lots.
The cities that are doing this have a bunch of unfeeling bastards on their city councils, and the same for voters who vote for this kind of thing. Where do they expect people without homes to sleep? And, for the amount of money some towns spend on ridiculous, useless projects (like, in my current town--an unneeded dog park right next to a human park, and an armored tank for the police department, when there is little violent crime here), they could build enough affordable housing for almost everyone who needs it.