> Homeless shelters are overcrowded and extremely unhygienic.

It's not just the hygiene. it's that in those shelters you're constantly surrounded by a few mentally ill and possibly violent people who will lash out in unpredictable ways and make life worse for everyone with their constant tics and noises making you live in constant anxiety.

If you're homeless but not mentally ill yet, then being in such an environment everyday will definitely negatively affect your sanity as your daily struggle becomes surviving the shelter, instead of working to getting back on your feet. Kind of like being locked up in a prison but from which you can leave.

So then no wonder a lot of homeless people feel safer and less stressed just living and sleeping in public areas than in shelters.

Where I live our homeless shelters are hygienic and not overcrowded (they will not go over capacity, ever, due to health code / liability reasons).

They are usually not full either. However they have a strict no drugs, no alcohol, and no fighting policy. That means a lot of people aren’t interested in going to them.