I think the mayor’s position is reasonable. These services are already overrepresented in downtown. I like someone’s idea of refurbishing the old correctional centre. It could be a comprehensive facility run by the city which would be better than the hodgepodge of facilities run by private groups each with their own policies, agenda etc.
Every addition to supply lowers prices, even expensive additions, because they become options for people who'd otherwise contribute to demand for lower-priced options. Every new housing option contributes to fixing the affordability problem.