IMHO only, as a regular person who's lived in small towns and big cities, but not a economist/sociologist or anything like that: a combination of rural flight from homogenous communities plus increasing inequality.

In the US (and probably elsewhere too), we have a concept called the "urban-rural divide", in which different kinds of people live and work in the countryside vs the cities: https://en.wikipedia.org/wiki/Urban%E2%80%93rural_political_...

The cities, being the centers of commerce as they are, draw people from all different backgrounds (and in the case of the US) all over the world, seeking to make a better life for themselves. Sometimes it works out for those people, especially if they have relatively rare skills.

But for others who go there with their clothes and dreams, or just out of desperation, or are born into intergenerational poverty, the US doesn't really have any systems to help them climb the ladder. We like to think of ourselves as a place where any person can bootstrap themselves into success, but that is almost never the case, and for every self-made billionaire, there are a million people who are just barely scraping by, if even that. If you're not born into a good area with good parents and good schools and good internships and such, your chances of getting a good job later on in life are vastly diminished, your personal genetics and efforts notwithstanding. A large part of it is the birth lottery.

Then the darker side of urbanization comes into play: Namely, the de-communitization of societies. In smaller rural areas, the community is typically very close and tight-knit and homogenous, closer to villages than metropolises. It's the sort of environment we evolved in, with families and villages and small in-groups where everyone mostly knows everyone else and shares similar backgrounds and religions and other values, and in a way helps take care of each other. Sure, there's competition and interpersonal conflict and a lot of inbreeding and such, but at the end of the day they are more similar to each other than someone from across the world who eats, wears, works, and worships totally different things. If an outsider joins a small town like that, they'll likely assimilate into it because there's not much of a bubble for themselves. Or they can form their own nearby bubble, which is how we often end up with small cultural enclaves near metropolitan areas (the Chinatowns and ethnic neighborhoods).

If you end up in a city (or are born into one) without such a support network, well, then you're kind of on your own. Everyone else there is trying to make it, too, often barely able to juggle work, their own friends/family, networking, etc. and still being able to pay rent. It's a hustle, and it takes so much time to get anywhere (because of traffic), and everyone's always in a rush and in their cars or on transit, constantly in motion from A to B to C to D and repeating the cycle every day. There's barely any time to pay attention to the peers in their immediate circles, much less people much lower on the economic ladder for whom they have little direct social experience with. They're just a blip on your daily radar, people and streets to avoid on your day to work rather than a part of your in-group. You don't really know what they want or need or why they're there, how they ended up homeless, you just don't want to end up like them. So you keep hustling and keep avoiding them. For some, maybe their conscience eventually starts tingling, and they feel somewhat inclined to make their city less apocalyptic, but they don't really know what to do about it.

So they typically end up doing the easiest and laziest thing: Voting. Politicians virtue signal and claim they'll fix all the city's issues, but like everyone else, most of them them are in it for the hustle (especially in big cities, which are often a stepping stone to state or national power). Very few of them have experienced homelessness or poverty on their own, and they see it as just another metric to tinker with, not necessarily a collection of individual personal experiences. So they react to it and form policy groups and work with nonprofits, many of which are full of well-intentioned idealists who want to make things better but don't necessarily have evidence-based solutions readily available to them, so they try everything from moving and bussing, providing shelters, increasing emergency weather heating areas, drug legalization, safe injection sites, tent cities, sober housing, limited UBI experiments... but all of those are inadequate band-aids for a much deeper cancer inherent to capitalism: inequality is by design, and ultimately necessary for the top classes to exist.

During COVID, a lot of people in the US got free money every month and didn't have to work and didn't have to pay rent (and somehow the economy survived). There's so much money and resources, just poorly distributed, that these issues don't really HAVE to exist, but the MYTH of them must go on for the labor force to continue to want to work and race each other to the bottom (remember how hard it was for restaurants and retail to hire and keep people during that time?)

Well, IMO, urban poverty is just a reflection of that same phenomenon. We could fix it only by lessening inequality and making those areas more economically (and probably culturally) homogeneous, like smaller towns typically are, but then that would mean that there is a less of a hustle culture and less fear driving people to overwork themselves trying to climb to the top. It would lower GDP in order to improve societal well-being and happiness, which is not what our policymakers, economists, and powers that be want. The US wants a gilded society where 250 million people work their asses off so that 40 million can be comfortable and 10 million can be rich.

So instead we just keep virtue signaling, addressing the mere symptoms of deepening inequality and de-communitization, always trying to push the top of the ladder higher without bothering anymore to bring the bottom up with us. The rich get richer, developers see that and build more luxury housing, politicians optimize for the middle class and up, and affordable housing becomes something you only read about in history books or see in small towns or the token few regulated apartments in a city. And as small towns grow more popular, they see the same sorts of gentrification and eventually become small urban centers with similar problems.

Of course there's also other interconnected side issues like drug use, gangs, mental illness, deinstitutionalization, not wanting to work, etc., but those aren't necessary or sufficient to explain the widespread poverty and homelessness we see now. What little research we have into the causes of homelessness seem to indicate that many people float into and out of it for a while at a time, sometimes multiple times cyclically, but not necessarily because of those issues. Once you get stuck in that system though, it's really hard to climb back out, and all the other contributing problems become much more serious. If you're middle class, mental illness is something you deal with with a therapist. Addiction is something you can go to a treatment center for. When you're poor and out on the streets, you're mostly invisible and surrounded by others who are down and out and hopeless and if anyone pays attention to you, it's overworked and underpaid case workers and volunteers who don't really have much political or economic power to actually fix any of your problems.

Other societies/countries have poverty too, of course, but not necessarily the same level of homelessness that we see in modern developed capitalist economies. I think that goes back to the de-communitization thing earlier... few societies are are heterogenous as the US (and some European metropolises) are. They're less of a melting pot, and families and villages and towns tend to stick together more and support each other. Yes, they can still be poor on a purchasing power parity basis, but that doesn't really measure their daily life relative to others near them, just how much less spending power they have compared to first-worlders. But at least often they can share resources and housing, even if they can't afford the latest iPhone. That's way harder to do in an urban developed city where you're just one faceless hustler among a few million others, all struggling to get by.

So in the US we're kinda stuck. The upper classes who make the rules don't really want to lessen inequality by any measurable amount. They might pretend to, but that's just to get your votes, after which they'll just keep implementing the same sorts of policies and business-friendly regulations that keep making the country richer at the top, occasionally throwing scraps at the bottom. They've discovered that homelessness, crime, cultural divides, etc., can all be weaponized into "useful idiot" ideologies in culture wars that serve to divide and conquer the lower classes, keeping us busy fighting each other over ultimately minor, irrelevant things rather than trying to do anything about the economic system as a whole. The system, in their eyes, isn't broken. It's working as designed, and urban blight is a good weaponized reminder that you better work harder or you'll end up like them.