Ok, call it handouts. But if you just care about the budget, providing housing is the cheapest way to solve the problem. Will some people "take advantage" of this arrangement? Sure. Does it matter that much?
But why does it matter, if the alternative is objectively worse for everyone concerned, even the taxpayer funding this "free" housing that some might abuse?
It's a perverse incentive. When people figure out the loophole, people who don't need the help will fill up all the allotted space, because who doesn't want free rent?