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Before you make assumptions about my person opinions, I'm very pro-legalization, I think prohibition of basically anything is very misguided. If I were in charge, everything, including heroin and fentanyl, would be legalized, taxed, and regulated.
The lack of affordable housing in Portland drives homelessness; and being homeless pushes people to use meth during the night to stay awake so they can protect themselves and fentanyl so they can feel joy while living in truly wretched conditions. Keeping people off the street by building affordable housing and preventing people from despairing avoids a raft of social ills.
That said, per your point decriminalization of possession and public intoxication, measure 110 was a poorly written law that should have decriminalized drugs after harm reduction, substance abuse clinics, and housing options were in place first. The current situation wasn't guaranteed to happen; unfortunately city and county leadership like to wear their pants on their head instead of actually getting work done. This was as much if not more of a failure of governance to execute as it was a failure of policy.
Portland planned to decriminalize a lot of things and put a bunch of other measures and support systems in place. COVID and other things hit, and all that got enacted was decriminalization with none of the guard rails or help mechanisms, with predictable outcomes.
You can literally watch interviews with the homeless in SF and Seattle. They cite these facts straight-up as to why they live in SF and Seattle. You have to be actively lying to yourself to come to a different answer.
Murdoch and co. will have you believe Seattle is a fentanyl-ridden wastleland. Property values say otherwise.
If not, doesn’t it seem likely that previous looking the other way has contributed to the current status?
Within a given city, yes, the nicer bits are more expensive. Between different cities, however, it is totally possible to find one city is both cheaper and nicer than another (with the possible caveat of being smaller, and perhaps if you can't WFH, not as many jobs).
To use an example I know well, basically every city in France outside of Marseille is nicer to live in than Paris, but Paris has real estate prices that are 2-4x most other cites.
I imagine you could find similar things in other countries as well - Amsterdam vs Eindhoven in the Netherlands, for example.