The problem is that areas that are affordable enough to create more, cheap housing are not near the services that the homeless need and use. I'm in Denver and housing in the city is somewhat pricey but there is tons of land just outside the city that could be developed but you'd be hard pressed to claim that would help homelessness because all the services they use and people they accost are downtown
We don't need to create cheap housing near homeless services. We just need to a) create a lot more housing and b) make sure some of it is affordable. It doesn't necessarily have to be in a particular area.
If we create enough housing, it increases affordability. If people don't wind up homeless to begin with because astronomical housing prices are no longer one of the issues complicating their lives, they don't need homeless services.