Technically it's not illegal to sleep on the street, but there are sanitation rules regarding it. NYC has 8 million people. Any problem you can think of is magnified. It's literally a sanitary issue if you allow thousands of people to camp outside.

https://www.nytimes.com/2023/05/26/nyregion/nyc-homeless-camp-bill-of-rights.html

In New York City, there are many rules on the books that have been used to restrict sleeping rough.

One is a piece of sanitation code that makes it unlawful to leave “any box, barrel, bale or merchandise or other movable property” or to erect “any shed, building or other obstruction” on “any public place.”

In city parks, it is illegal to “engage in camping, or erect or maintain a tent, shelter or camp” without a permit, or to be in a park at all between 1 a.m. and 6 a.m. unless posted rules state otherwise.

And on the property of the Metropolitan Transportation Authority, both underground and in outdoor elevated subway stations, it is a form of banned disorderly conduct to “sleep or doze” in any manner that “may interfere” with the comfort of passengers. Nor may subway riders “lie down or place feet on the seat of a train, bus or platform bench or occupy more than one seat” or “place bags or personal items on seats” in ways that “impede the comfort of other passengers.”

Note that these rules also restrict people who have homes too. No one can have a party in the park after hours or take up a ton of space on the subway. Note also that you can sleep outside if you don't get in the way.

someone who did not violate any of those rules — say, someone who set a sleeping bag in an out-of-the-way spot under a highway overpass and did not put up any kind of shelter — was legally in the clear, at least in theory.