I worked as a child welfare caseworker for over ten years in an affluent county in New York state.
If the parents are good parents, the goal is always to keep the family together. Some counties have family shelters, some don’t. The county I work in has all kinds of shelters (family shelters, shelters for men, shelters for women, shelters for all genders). The family stays there together, the children go to school, and all kinds of services are offered (therapy, medical, and housing assistance to find housing, substance abuse treatment, among other services).
If the family is offered a shelter and they still prefer to sleep outside, then the children are taken away. As it was described once, “you can sleep on the railroad tracks but your children can’t sleep on the railroad tracks.”
Once the children go to foster care, it’s a whole song and dance to get them back. It’s not like just put them there temporarily as a housing situation. Foster care entails court visits and the bio parents have to jump through hoops and prove that they’re worthy of having the children back.