If the state has problems staffing and funding mental homes, then the state should have a budget fix. Rearrange their tax expenditures to take care of those needs.
But for sure, expecting privately owned cheap hotels to do the job for the state for homeless mentally ill and drug addicted people is moronic on an epic level. Anyone with common sense can see that? That entire neighborhood will soon be a slum.
The state should buy those properties, renovate them to their needs, and run the housing with professional staff educated to deal with the needs of the homeless, with profesional counselors and medical staff.
If corporations buy land, that means more tax revenue for the state. Unless the politicians are giving them special tax breaks.
Look to see how the state is allocating funds. You'll probably find that it is done to financially benefit politicians. Follow the money trail and you will find greedy corrupt politicians for every greedy developer.
But by all means, keep re-electing those crooks and learn to expect the same old shit.