It is an unwritten social rule that prison is a place of punishment for transgression, and as such separate from the free population. Opening spare prison cells to free people in need of shelter (whether the unhoused, or paying tourists/seasonal labourers, or low-income tenants), with some residents having different privileges than others, would violate this separation and the symbolic significance of prison.

A similar policy would be to make housing double as a low-security prison: have the locks be configurable so that apartments can be reconfigured as cells. This would make it too easy to go between freedom and imprisonment, though: in a free society, this process is meant to have a lot of friction. Of course, there is currently due process meaning that your leaving-the-house privileges can’t be revoked summarily over, say, unpaid bills, though they are now a matter of policy and can be changed as such.