The Supreme Court wrestled with major questions about the growing issue of homelessness on Monday as it considered whether cities can ban people from sleeping outside when shelter space is lacking.

The case is considered the most significant to come before the high court in decades on the issue as record numbers of people are without a permanent place to live in the United States.

In California and other Western states, courts have ruled that it's unconstitutional to fine and arrest people sleeping in homeless encampments if shelter space is lacking.

The case comes from the rural Oregon town of Grants Pass, which started fining people $295 for sleeping outside to manage homeless encampments that sprung up in the city's public parks as the cost of housing escalated.

"What we saw this morning over lengthy arguments is I think the liberals been very concerned with this law and other similar laws, these anti camping ordinances, and how exactly they're applied," said Jessica Levinson, a law professor at Loyola Law School. "And what I think we saw from the conservatives was a desire to allow cities and counties to try and use their broad police powers to implement ordinances to try and fight the homelessness crisis."

The justices appeared to be leaning toward a narrow ruling in the case after hearing arguments that showed the stark terms of the debate over homelessness in Western states like California, which is home to one-third of the country's homeless population.

Sleeping is a biological necessity, and people may be forced to do it outside if they can't get housing or there's no space in shelters, Justice Sonia Sotomayor said.

“Where do we put them if every city, every village, every town lacks compassion and passes a law identical to this? Where are they supposed to sleep? Are they supposed to kill themselves, not sleeping?" she said.

Solving homelessness is a complicated issue, said Justice Brett Kavanaugh. He questioned whether ticketing people for camping helps if there aren't enough shelter beds to hold everyone, but also raised concerns about federal courts “micromanaging” policy.

Other conservative justices asked how far Eighth Amendment legal protections should extend as cities struggle with managing homeless encampments that can be dangerous and unsanitary.

“How about if there are no public bathroom facilities, do people have an Eighth Amendment right to defecate and urinate outdoors?” said Justice Neil Gorsuch.

Other public-health laws cover that situation, Justice Department attorney Edwin Kneedler said. He argued people shouldn’t be punished just for sleeping outside, but said the ruling striking down the Grants Pass law should be tossed out because the court didn't do enough to determine if people are “involuntarily homeless.”

Gorsuch and other justices also raised the possibility that other aspects of state or federal law could help sort through the issue, potentially without setting sweeping new legal precedent.

The question is an urgent one in the West, where a cross-section of Democratic and Republican officials contend that the 9th Circuit's rulings on camping bans make it difficult for them to manage encampments. The appeals court has jurisdiction over nine states in the West.

Advocacy groups, on the other hand, argued that allowing cities to punish people who need a place to sleep will criminalize homelessness and ultimately make the crisis worse as the cost of housing increases.

A a cross-section of Democratic and Republican officials contend that makes it difficult for them to manage encampments, which can have dangerous and unsanitary living conditions. But hundreds of advocacy groups argue that allowing cities to punish people who need a place to sleep will criminalize homelessness and ultimately make the crisis worse as the cost of housing increases.

Dozens of demonstrators gathered outside the court Monday morning with silver thermal blankets and signs like "housing not handcuffs."

The Justice Department has also weighed in. It argues people shouldn't be punished just for sleeping outside, but only if there's a determination they truly have nowhere else to go.

"I think that if the court were to uphold this particular law, you are going to see people who are on the streets who are going to be subjected to these fines that they simply can't pay," Levinson said. "Part of what's going on here is cities and towns and counties trying to move the homeless crisis out of their boundaries. And if everybody has an anti camping ordinance like this, that just isn't possible. You're pushing people into an impossible choice."

The measure was largely struck down by the San Francisco-based 9th Circuit Court of Appeals, which also found in 2018 that such bans violated the Eighth Amendment by punishing people for something they don't have control over. The 9th Circuit oversees nine Western states, including California, which is home to about one-third of the nation's homeless population.

"This could be a 6-3 decision in favor of Grants Pass," Levinson said.

The case comes after homelessness in the United States grew a dramatic 12%, to its highest reported level as soaring rents and a decline in coronavirus pandemic assistance combined to put housing out of reach for more Americans, according to federal data.

The court is expected to decide the case by the end of June.