3. Transient homeless that tried to get back on their feet but was met with the notion that all the options were eventually exhausted (they lived on their friend's couch until he got married). They even had dishwasher jobs, but inevitably, because rent was $2000 more than they would ever have - they decided to do drugs and live on the street because no amount of work at the wage they would be paid would ever make their life meaningful.
Imagine struggling with addiction or mental health issues. Now imagine doing it without a safe and secure place to even sleep at night.
For drug addiction the problem is more subtle but I question whether this part of the pipeline is worth considering when looking at the problem at scale. There is no serious attempt as far as I'm aware to measure the number of people that transition from #2 to #1 style homelessness, and since it is difficult to measure this it is very likely that solutions to #2 will have no effect on this pipeline.