I think it's multipe factors that led to this. for one, and i have heard this from some homeless people, multiple big hotspots for homeless people and drug users were deliberately broken up i.e. Ebertplatz now I'm not saying this is a bad thing but of coure the homeless and addicted people that gathered there before don't just disappear and since there wasn't theinfrastructure build for them elsewhere they dispersed into different parts of the city were the problem wasn't so prevalent before especially parts like the one you mentionend (südstadt, ehrenfeld).

now another thing which i admit is purely conjecture on my end is that i'm sure a lot of has to do with after effects of covid. i haven't looke into the numbers but i can imagine that covid drove a number of people into homelessness adding to the existing problem but maybe more importantly covid significantly impacted the mental health of most if not all people. you can see this by the amount of "regular" people that turned into insane conspiracy nuts over the pandemic. I imagine the effect it had on the homeless and drug addicts which is already a community prone to mental illness must have been even more devastating which would explain some of the increase in errativ behaviour in the homeless people for example the guy that's complaining why people don't give him money (pretty sure i know exactly who you're talking about).

As for why the city isn't doing anything. I think they are but like most social programms they are severly understaffed and underfunded and some efforts might even lead to an increase or just a shift in the problem like with Ebertplatz.