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I agree with you, except free housing should be available without conditions. Isn't the threat of homelessness just another form of coercion? Americans have more than enough existing housing and food production to provide for everyone. We force artificial scarcity into both markets to preserve profits, because it's harder to raise rents when a free option exists.
Mental health and addiction are both medical problems. Trust is always an important part of medical treatment, but trust runs both ways. Can we trust people with those issues to seek treatment on their own? Doesn't society have a compelling interest in treating their conditions?
I'm not advocating for the police to start rounding up homeless people and dumping them in overburdened psych hospitals. I'm not even advocating for this law. We need far better treatment options, healthcare in general, and economic reform before we should ever expect to address homelessness and mental health. I just don't think we should take anything off the table when it comes to ensuring people get treatment. Force might work for some people. It might make things worse for others. The goal, however, is worthy of discussion and the methods cannot be dismissed out of hand.