I see two problems here (the same as with most similar places):
1. Governments (any level) seem incapable of actually dealing with their problems, no matter what the problems are. They haven't been able to figure out that you can't just make a law against something and expect it to solve all of the problems. Yes, they can enforce the laws and force the people to leave, at which time they become someone else's problem. This is not 'solving' the problem.
2. No matter where people park their rigs, unless the rules are enforced it's going to become a pig sty.
City govts are not capable of facing the fact that they're not going to eliminate people living in their RVs, vans, trucks, cars or tents.
Why not provide a spot where people CAN park their rigs, provide some basic rules, and then provide some enforcement? NO, IT'S NOT GOING TO BE FREE. Nothing else is free in the operation of a city, so why would anyone think this would be??? They pay $XXX number of dollars to prevent the cost from multiplying to $XXX,XXX dollars. Is that so difficult to understand? Apparently, it is.
When each person moves in, give them a list of basic rules. If they don't obey the rules and/or start trouble, evict them.
Have a guard at the entrance to prevent people from bringing in the old mattresses, torn couches, and bags of garbage for dumping.
Run it like a very basic RV park, and ENFORCE it. When people know you mean business, they will usually obey, or leave. Isn't this what the LTVA (Long-term Vehicle Access) areas do?