Admittedly, reforming the current system would be hard, but theoretically it wouldn't have to be bloody.

Yeah, hopefully. If you're effective enough at pushing for change though, those that are threatened by that change are likely to attack you with whatever resources they can muster, and you'll need to successfully defend your movement. Landlords and big corporate shareholders aren't going to be real keen on having their money spigot turned off.

I've often wondered what effect it would have on homelessness if there were land in cities where everybody was allowed to live if they wanted. I imagine it would basically end up as a favela. Not great, but probably better than homelessness.

Not having their camps bulldozed and all of their possessions confiscated and destroyed by the government every few months would definitely be an improvement for homeless folks. Being able to have a rigid structure with a locking door would be even better. But yeah, leaving it at that still isn't ideal.

If we could bring wealth inequality down significantly, that would mean fewer people going homeless in the first place, and also society's altruistic resources wouldn't be stretched as thin. That might be enough to get everyone into better housing, at least out of safety hazard territory.