The solution--call it the "Grapes of Wrath" solutio--is simple: the Municipality provides three campgrounds for the homeless.  No camping allowed anywhere else in the municipality.  The campgrounds have toilets, showers, picnic tables.  Basic rules for safety and sanitation are posted.  A security guard patrols each campground.  Violators get evicted immediately.  The campgrounds close down on October 1 and reopen on April 1.  

Would there be a cost?  Of course.  But there's already a cost to our current helplessness over this issue.

How about NIMBY?  Well,  I didn't exactly want a Quik Stop in my neighborhood, but it happened anyway.  The Municipality has the legal authority it needs to decide what locations best provide for the public good.