This is kind of too bad since housing is so expensive in Bellingham. I've thought that allowing people to live in RVs and even tents is, at least, a partial solution.
It is a problem when the encampments get too large or confrontational. Otherwise, I think we do need to recognize a new class of housing as reality for lower income people.
There are problems with things like urine smells, but partial solutions, such as composting toilets can be used when sewer and water service isn't easily available.
Personally, I don't own property so I am not real worried about property loosing value. I just bike through areas where there are homeless people and it seems okay, unless there is crime. Law enforcement is not a bad thing, but there is a serious problem with home costs going up.
I can understand why some people still don't wish to live in congregate shelters. Maybe it's not the rules that are the main problem. I can see why some folks wouldn't want to sleep in a room with a lot of other people who might be snoring, for instance.