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We had this conversation one day when I was living in San Francisco. There are (or were 10 years ago) many vacant apartment buildings in the city. Many homeless people would squat in them. The mayor at the time, Frank Jordan, made it his personal crusade of eradicating the homeless problem by locking them out of every place he could imagine, thereby hopefully driving them from the city.
My friends and I decided that if we ever won a large amount of money like that, we would set up a foundation similar to Habitat for Humanity where we would buy up some of these vacant buildings and offer them to the homeless as homes. The condition was that their labor in refurbishing the buildings would be their downpayment. They would also receive job training and skills that would enable them to obtain work (for the non-mentally ill, that is). Once they were gainfully employed, they would pay a flat 20% of their income as a home payment.
Sure, we didn't think it through completely, but we felt it was a hell of a lot more humane than what the mayor was doing at the time.
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"I can normally tell how intelligent a man is by how stupid he thinks I am" - Cormac McCarthy, All The Pretty Horses
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