They want free prison labor instead of helping people.

They don’t even really want that, at this point. Prisoners are increasingly geriatric, malnourished, and prone to mental illness, making them unreliable employees at their best and completely unprofitable more often than not.

All programs that gave people shelter and UBI had high success rates of getting people off the streets.

Ah, but you’re forgetting the mystery third option. Pack undesirable people into cages during a plague or a heat wave and kill them from behind bars. This is significantly less expensive than either enslaving them at a loss or funding housing/UBI.