Because home prices and rents keep going up. Homelessness is an inevitable side effect of that.
Funneling money on rehab rather than providing places to actually live cant fix that. It's attacking a symptom not the cause.
However, attacking the cause (property prices/rents) would make a lot of very rich, very powerful people very angry - all backed by an army of overleveraged homeowners terrified of negative equity.
Until property owners are apoplectic with fury about declining property values I doubt the problem will stop getting worse.