I think a fundamental problem comes from the assumptiom that "the government should take care of it"

You have The State, which organizes a city according to their own framework, optimizing for things they care about while the things they aren't measuring are invisible to them. The State creates grid cities to make it easy for "outsiders" to navigate and intervene, which by design, creates opportunities for bad actors to navigate and extract resources they need.

"Wow, this place is overrun by CRimiNalz!! 😱 What do we need to do? We need to put more restrictions on the city to stop them! But where does it happen? We need to figure that out as well! We need monitors where we see the BAD behavior and stop it before it gets to our neighborhoods! Wow, can't you see?! We have so much work to do, and we need more funding!"

You have The State operating its own framework, imposing rules upon a city that they aren't a part of, and when they observe behavior that goes against their ideals, they impose their framework harder. They're able to do so through leveraging the authority and power they have.

What happens then, to those at these margins? Society itself then assumes that the mentally ill, sick, and violent are the responsibility of The State, failing to recognize them as neighbors. The State also assumes this responsibility, to the point where individuals taking matters into their own hands are punished:

- you have people trying to feed the poor getting fined

- self defense being criminalized

- doctors prohibited from giving advice that contradicts authorative medical knowledge

This doesn't negate the purpose of a healthcare system, or any other centralizing system, but rather points to the fallacy that order is best managed from some top-down outside perspective that fails to recognize the specific lived experiences of the individuals navigating said systems day to day.