I don't want to live in my current house. I want a mansion, complete with indoor pool, bowling alley (I haven't been bowling in 15 years, but just in case I get the urge I want one in my house), large shed for my antique car collection (which of course I want the money to afford to have), plenty of land for horses, with an entrance to the subway just outside the door. The above is not a complete list, and I'm sure you can come up with lots of other things you would like in a house that you cannot afford.
If you look at the list above you will realize that some things are contradictory - you cannot have everything no matter how rich you are. It gets worse when you start adding more desires.
Some of use have enough money to afford a nicer house than others. However when you get down to what you actually need to live a capsule is a good minimum - nice enough that if you cannot have more you still have an acceptance quality of life. However not so nice that people who could afford more refuse to contribute to society.
Yes, it's a minimal baseline that can be cheaply provided, that still preserves 90% of the dignity of human beings, their health, safety and ability to work, without unduly burdening other taxpayers.
A safe bed could be recognized as a basic human right without leading to a "world of lazy people" moral panic.
A safe bed, clean bathroom, and a small kitchen with space to eat. Doesn't take much space, and is what the homeless who can handle a house need. (not all homeless can handle a house)
Mobile homes aren't great, but they beat a tent or a cardboard box. And they provide some stability compared to not having any tenant / property rights.
Also a cheap option that doesn't involve sharing walls. I looked into living in them because I have PTSD and hypervigilance + the lack of insulation in the buildings/apartments affordable to the poor = a living hell. And without addressing the PTSD, I couldn't have the fortitude for a job paying any better.
I rented one for a while and it was far better than 'not great'. Only downside really was the noise from the air circulator located inside, otherwise it was pretty much a normal 3 bed 2 bath small home.
Don't worry, I'm sure someone will come along and suggest we build $150,000 tiny houses, or shipping container houses. Mobile homes are just not cool enough for the bro who wants to save the homeless.