I live there in that city. There are hardly any homeless at all here. Not like other cities at least. I could see it being a major problem in other places.
It does seem that it should be possible to offer "free buses" without having to also offer "free hotels inside of the free buses". As an example, I can go to a local store and experience free parking or go to my nearby town and park for free downtown. I can't, however, park and sleep overnight in my car in that shopping centre or in that town.
Who’s supposed to enforce it? Is the driver supposed to pull over and wake up a sleeping person who has a small but real chance of stabbing them? Any situation where they call the police could be quite a hassle for the other passengers.
Because you can’t make a subjective judgement with regard to the worthiness of a particular passenger of a public resource. A car on private property eventually becomes trespassing.
Why can't buses be regulated the same way?