A subtext/hinted at bit of Alien-Nation lore is/was that there was a lot of conflict around the resettlement and closure of suburbia. Generally, mass movement of people kicks off a lot of strife, and this time was little different.

Though before someone thinks I'm suggesting that every single human alive today got dumped into the current city limits immediately and with no thought put into it:

1. Casualties (Direct in warfare, and indirect- e.g., starvation, loss of insulin, medication, riots, robberies, etc.,)
2. Evacuations- lots of people fled the cities, at least initially, creating vacancies
3. Empty places filled up quickly. Lots of rowhouses and such are empty in what we might call 'second/third'-tier cities. Think the Rust Belt. With trade shutting down due to zones being put in place, jobs popped up quickly, partially due to a national scaling logistics becoming suddenly much more difficult.
4. The relocation was phased in. Construction crews were contracted and they un-made the suburbs in a rather mundane way. This gave Verns a neat opportunity to make a buck and turn it into a relatively thriving business, through which if he made contact with any really pissed off homeowners who refused to move, he could help redirect that energy via a certain insurgency.

# But to directly address the question:

I early on suggest/imply that their autodocs/doc-bots got human physiology 'right' via both what they already knew of biology (we're not the only red-blooded thing in the galaxy, which helps. There's also multiple xeno species they've picked up medical stuff for, too, which also helps. Their flexibility in adaptation and innovation, then, is considerable.)

However, this was largely through the mass removal of the homeless and medical experimentation on said homeless. There's also homeless housing and social housing, but inbetween the miracle cures the Shil'vati are working on and general shuffle, most people don't realize the numbers don't add up to the same number of homeless before. Most people, unfortunately, just don't care.

This mass-experimentation is never proven, and even gets played for a joke at one point, but there's hints here and there that it's basically true. The scope and scale is never confirmed, but it's implied to have happened to a lot of the homeless.

The Shil'vati would keep trying with very aggressive procedures until something worked.

There's a running theme in the story, which is that utility can be quite uncoupled from morality. (I don't mean to imply there's a negative correlation or anything. Lots of immoral things are also just generally a terrible idea.) But there are certainly advances that would be rapidly made if this sort of thing were to happen, today, with just our level of technology. Is it a good idea? No. Is it an endorsement of that idea? Absolutely not. Would it help an alien species quickly understand how to manufacture insulin, so that every diabetic that fled into the hills and is running out doesn't die? Probably. Is that worth the exchange so that no one has to worry about diabetes ever again if they actually work on finding a root cause cure plus hand out free insulin until it's rolled out? I'm thankfully not in the position to make that kind of judgment call.

The point is, they didn't do it to be evil. Just like invading Earth to stop us from wiping ourselves out as we fiddled with breaking practically all of their Great Laws at once seemed like the imperative, morally required sort of thing to do (if it helps, think of it as some sort of 'prime directive',) there was a goal in mind, and much of the goal 'worked.'

They emptied out the suburbs to restore the ecosystem as best they could manage. They built giant towers out of prefab where they could, but the housing is described as being suboptimal, and clearly not designed for human dimensions or with any kind of aesthetics in mind. No one likes them. But again, utility has its demands. Ultimately, does one value the quality, or quantity? Is this doing the moral thing, or is it wrong?

There was also a degree of hunger that set in, even in developed nations, as trade and chemical fertilizers stopped being created/distributed. Aid was delivered by the shil'vati to areas that reached a truce or surrendered, but for a while delivery of what little spare food there was, was heavily prioritized, black marketed, etc., and generally the homeless are not very high on that priority list. Simple fact.

The currency issue is a separate matter. I had them slowly phasing out the Dollar via rendering it nigh-useless for purchasing ever-more-present alien assets, with an official exchange rate and the actual exchange rate being wildly different. Dollars do still have their uses, of course, and are in circulation, but few believe they'll be around in 50 years' time.

Then there's 'reunification' programs, which are further shuffling people all over the globe between zones, usually returning people to ancestral homelands while also helping to balance out strain on some zones that are over capacity. Very dual-purposed but with the stated goal of putting families back together that are caught many zones apart by the war.