The Causes of Homelessness in America
by Daniel Weinberger
Poverty & Prejudice: Social Security at the Crossroads

This paper will examine the relationship between structural factors in American society and individual short-comings and inadequacies in explaining the rise of homelessness over the past several decades. In particular, it will posit that structural and individual factors are often inextricably linked in the cycle of poverty and homelessness, and that they tend to re-enforce each other as they are manifest socially, politically, and economically in American society. And yet, the degree to which structural or individual factors play the most decisive role in contributing to homelessness in a particular case varies significantly depending upon the specific circumstances of that case. As a result, the first section of this essay will outline some of the broad-based structural and individual factors which largely account for poverty and homelessness in the American context. The second section will then analyze the relative strengths and weaknesses of these differing factors as they play out in the lives of the majority of the American homeless.

Poverty has existed in some form in American society since the founding of the nation in the late eighteenth century.1 Indeed, by the turn of the twentieth century the "percentage of Americans defined as poor by consistent standards was as high as it ever had been or was to be" - approximately 40 percent of Americans in the year 1900.2 This early twentieth century predicament, however, was largely the result of two interrelated problems at the root of early capitalist development in America. That is, an "economy insufficiently abundant to provide subsistence for all the able-bodied, and a social order that inequitably distributed what wealth there was."3 Moreover, "there was no unemployment insurance, little public welfare, and virtually no old-age pensions."4

  1. James T. Patterson, America’s Struggle Against Poverty: 1900-1994 (Cambridge: Harvard University Press, 1994), 10
  2. Patterson, 13
  3. Patterson, 6
  4. Patterson, 8

The situation in late twentieth century America, however, is qualitatively different. An extensive welfare state has grown up out of the experiences of the Great Depression and the "rediscovery" of poverty in the early 1960s. Moreover, the United States in the post-World War II era has occupied an unchallenged hegemonic position in the capitalist West which has resulted in the dramatic expansion of the American economy and its capacity to raise the standards of living for the American populace. And yet, as James Jennings notes, "despite a range of policies aimed at reducing its length and impact, poverty among Americans persists as a major economic problem, with far-ranging social, health and educational implications."5

Indeed, in the early 1990s the poor constituted 14.5 percent of the total American population - approximately 40 million citizens (noting that these figures are "widely regarded as being unrealistic and having lost all relationship to living expenses").6 A large percentage of these people were actually part of the workforce. Moreover, the 1990s has also "witnessed the largest income gap between rich and poor since at least 1947 when statistics started being kept."7 In addition, there are "persisting gaps between blacks, whites, and Latinos in how they experience poverty and, in many instances, in how society treats the poor in these different communities."8 There has also been a dramatic increase in the number of women and children now living in poverty in the United States. Indeed, one in four of children under the age of six currently lives below the poverty line.9 And for the first time in United States history, American society has witnessed the emergence of a "class" of homeless people dating back to the mid-1970s.

  • James Jennings, Understanding the Nature of Poverty in Urban America (Westport: Praeger), 56
  • Homebase Report, Homelessness in the Bay Area: Transform Basic Causes — Meet human Needs (The Center for Common Concerns, 1994),12
  • Homebase Report, 18
  • Jennings, 62
  • Homebase report, 17
  • Since homelessness is largely about poverty, therefore, we can attribute some of its structural causes to this late twentieth century, capitalist economic predicament. But what are the specific economic reasons for the rise in homelessness within the framework of these general contemporary conditions of poverty? And what additional structural problems account for homelessness in America today?

    In particular, structural changes within the American economy over the last twenty years have had a profound impact on the economic landscape of the "bottom" segment of American society. The transformation can be characterized by a general move in America towards a more "post-industrialized" and global economy. Domestically, that implies a shift "away from relatively well-paying manufacturing jobs to minimum wage service jobs and temporary or part-time positions."10

    Indeed, America's integration into the world economy through a multitude of regional and multi-lateral trade agreements over the last two decades resulted in the net loss of about 7% of jobs in the manufacturing sector between 1979 and 1994. Consequently, between 1980-1988, 88% of all new jobs created were in the service sector.11 As the Home Base Report notes, 'lobs in services pay approximately half the pay of jobs in manufacturing."12 Moreover, since 1973, wages have fallen 16% after adjusting for inflation, while the minimum wage has also failed to keep pace with rising prices (the hourly rate in the early 1990s was $1.25 lower than the rate in the 1970s when adjusted for inflation).'3 Welfare benefits have also lagged behind increases in the housing market and in living expenses. In addition, the labor market is increasingly dividing workers by education and skills. The Federal Department of Labor "estimates that within five years, 75% of all jobs will require post-high school education for entry-level positions."14

  • Homebase Report, 14
  • Homebase Report, 14-15
  • Homebase Report, 15
  • Homebase Report, 13
  • Homebase Report, 16
  • Collectively, these realities mean that more and more people have become incapable of earning enough, even with several jobs, to provide themselves with the basic provisions of life (i.e., a house). For minority groups like African-Americans and Latinos, these realities are often felt even more deeply, given their historical legacy of battling with structural racism and generally worse conditions of poverty than their white counterparts throughout the twentieth century.

    This structural transformation in the American economy was highly exacerbated by the conservative, neo-classical fiscal policies of the Reagan administration. These policies followed on the heels of the recession of the late 1970s which, by 1982, had left 10 percent of the workforce unemployed.15 They included: (i) a tight monetary policy characterized by high interest rates, benefiting wealthy creditors while impeding economic growth, (ii) economic deregulation and a favorable stance towards corporate mergers, (iii) the "reduction of top individual and corporate income tax rates", and (iv) an unequal taxing scheme which took a greater share of income away from low income families in comparison with those with greater income.16 These policies, along with others part of the "Reaganomics" fiscal program, contributed to the creation of 9 to 10 million more poor people in the 1980s, the increasing "feminiziation of poverty" in the United States, the rise of an "urban underclass" in the inner cities, and the widening relative gap between the rich and the poor within American society.17 All of these factors had a significant impact on the rise in homelessness throughout the 1980s and early 1990s. Indeed, while the economy surged upwards in the mid-i 980s, as Patterson suggests, "the social damage imposed by [this legacy] was severe and lasting."18

  • Patterson, 211
  • Homebase Report, 20
  • Patterson, 215, 219
  • Patterson, 211
  • There are three additional structural factors which have contributed significantly to the rise in homelessness over the past several decades, and which continue to exacerbate the problem today. They include: (i) rising housing costs and transformations in the national housing market, (ii) the lack of relative expansion in the government "safety net" and the inability of social service programs to keep pace with increasing demand, and (iii) the pervasiveness of socio-political norms and attitudes that stigmatize the homeless in the policy sphere and thwart efforts of homeless service providers to meet the needs of the homeless population.

    (i) Since the mid-1970s, affordable housing has become increasingly scarce and beyond the reach of many people living in poverty because they are forced to contribute increasingly larger proportions of their income towards housing. Moreover, once they are homeless they find it increasingly difficult to get themselves back into affordable housing. There are several causal explanations for this new phenomenon.

    First, is the loss of housing units and the failure of government and private contractors to build new low-cost homes. Indeed, while in 1970 there was a surplus of approximately 2.4 million low income units in America, by 1985 there was an estimated deficit of 3.7 million.19 Next, is community opposition to low-income housing (NIMBY syndrome). Third, is the federal government's withdrawal from housing production. As the Home Base Report suggests, the federal Housing and Urban Development appropriations for "subsidized housing fell from $32.2 billion in 1978 to $9.2 billion in 1988", while under President Clinton HUD's appropriated budget remains "less than half of what it was under Jimmy Carter in 1994 dollars."20 Fourth, is the inability of lower class incomes to keep pace with rising rents. Indeed, "one-third of all Americans - 78 million people -are 'shelter poor', meaning that they have to spend so much on housing they lack sufficient income to pay for other basic necessities.,,21 And fifth, is the functioning of the mortgage finance system.22 Indeed, "speculative forces, in addition to government deregulation of the savings and loan industry and the expansion of the secondary mortgage market in the 1980s, contributed to higher interest rates, higher housing costs and an explosion of debt."23 Between 1980 and 1987, average household morgage debt increased 30%, with the result that the rate of foreclosure has increased four-fold since 1980.

  • Homebase Report, 23
  • Homebase Report, 24
  • Homebase Report, 25
  • Homebase Report, 30
  • Homebase Report, 30
  • Christopher Jencks, however, lists changes in the housing market as a "less-promising explanation" for homelessness since the mid-1970s. He argues that, in fact, most of the rent-burden increase in housing occurred in the 1970s before the homelessness crisis, while low-income tenant's burden rose very little in the 1980s.24 Moreover, he argues that a large portion of the rent-burden increase in the 1 970s and 1 980s was linked to improvements in the quality of housing, and also erroneous statistical calculations which failed to take into account increases in low-income tenants unreported assets.25 Jencks also notes that "vacancy rates in unsubsidized low-rent units were high throughout the 1970s and 1 980s", suggesting that lack of housing was not a reason for the rise of homelessness during that period.26 And lastly, Jencks points out that while appropriations for low-income housing fell dramatically throughout the Reagan and Bush years, "actual outlays for low-income housing, measured in constant dollars, rose from $9 billion in 1980 to $18 billion in 1992, and the number of federally subsidized rental units grew from 2.9 to 4.7 million."27 Clearly, therefore, while rising rents and changes in the housing market have had some significant impact on the rise of homelessness over the past several decades, precisely what that role has been is still being strongly contested.

  • Christopher Jencks, The Homeless (Cambridge: Harvard University press, 1994), 83
  • Jencks, 89
  • Jencks, 88
  • Jencks, 97
  • (ii) The lack of expansion in the government "safety net" along with inadequate social services also constitutes an important structural determinant of homelessness. The 1970s were the beneficiary of "the explosive increase in social welfare payments, the quiet expansion of in-kind benefits, and general economic growth which collectively had greatly cut back absolute poverty."28 However, the conservative policies of the Reagan administration throughout the 1 980s "pared expenditures for food stamps, unemployment insurance, child nutrition, vocational education, the Job Corps, and the AFDC, and also terminated public service employment."29 Indeed, Reagan's Omnibus Budget Reconciliation Act of 1981 "increased poverty by roughly 2 percent" in only two years.30 Moreover, as Patterson notes, by the mid-1980s the "welfare system revealed the same limitations and anomalies as it had for decades." Among these limitations were the fact that AFDC benefits, "which were not indexed for inflation, fell nationally by almost one-third in real terms between 1976 and 1985....while in many states the benefits remained far below the official federal poverty line."31 Indeed, these limitations are largely a result of the fact that "the system is not designed to take a comprehensive view of people and their ongoing needs, and therefore it serves least well those whose needs are multiple and long term."32

  • Patterson, 199
  • Patterson, 212
  • Patterson, 212
  • Patterson, 210
  • Homebase Report, 33
  • The Clinton legacy reveals this problem strikingly. As Patterson notes, by the mid-1 990s the social safety net in America "continued to have dangerous holes in it. The United States taxed less and spent less per capita on social welfare, broadly defined, than did all other industrialized nations of the West."33 This is clearly manifest in the lack of comprehensive health services for all American citizens, the de-institutionalization of the mental health sector in the past two decades, the lack of substance abuse rehabilitation centers, and the absence of childcare, educational, legal, and family life services for poor people in America. Collectively, these have all helped create the unstable environment for the poor that has contributed significantly to the rise in homelessness over the past 20 years. In addition, once homeless, people find themselves even more dependent on the same systems that have already failed them once.

    (iii) And finally, the pervasiveness of norms and attitudes in American society that stigmatize the poor and the homeless tend to exacerbate the problem. The notions of liberal individualism and of a historical American "work ethic" which pervade American society often place the homeless on both the physical and conceptual outskirts of society. The wide-spread acceptance of the neo-classical economic paradigm in the American politico-economic sphere, the increasing centrism among political elites, and the proliferation of ideas like those of Charles Murray, signal that American society is moving farther away from the community-oriented paradigms of the 1 960s towards much more of an "each man for himself' attitude. This does not bode well for the future of poverty and homelessness in America. Indeed, it appears as though this trend will only further exacerbate this already critically pressing societal problem.

    33 Patterson, 231

    There are numerous individual factors (i.e., inadequacies and short-comings), which some social commentators claim have also had an effect on the rise of homelessness over the past twenty years. Chief among the factors most often cited are alcohol and drug abuse, mental illness, the rise in dysfunctional and single mother families, and general laziness and lack of initiative among certain segments of the population. Indeed, some intellectuals have posited that an intergenerational "culture of poverty" can explain on an individual level why American society continues to be characterized by a relatively high rate of poverty and homelessness.

    First, while alcohol abuse has existed in American society throughout the twentieth century, the argument suggests that transformations in the illicit drug market in the 1 980s qualitatively altered the impact substance abuse has had on the lives of the poor. The arrival of crack in the mid-1980s offered poor people a cheap alternative to alcohol, "making the pleasures of cocaine available to people who had very little cash and were likely to spend it on the first high they could afford."34 Indeed, Jencks estimates that by 1991, around 30% of all homeless single adults used crack regularly.35 The relationship of crack (and heavy drugs more generally) to homelessness is two-fold. First, homelessness may lead to crack and drug addiction because "big-city shelters are full of crack, and so are many of the public places where the homeless gather." Second, however, heavy drug and crack use can conversely cause homelessness directly by making "marginally employable adults even less employable, eating up money that would otherwise be available to pay rent, and making their friends and relatives less willing to shelter them."36 Moreover, drug addiction and crack use helps keep the homeless on the streets, as the drugs increasingly consume most of their disposable income. Drug use, however, is in most ways a personal decision. Therefore, many people feel that the homeless who do abuse alcohol and drugs are largely responsible for their own predicament.

    1. Jencks, 41-42
    2. Jencks, 43
    3. Jencks, 44

    Next, some suggest that mental illness among individuals has effected the rise in the number of homeless people in America. Clearly, the structural problems created by de-institutionalization and similar policies throughout the 1980s are at the root of this assessment. As Jencks notes, the mental health policies of limiting involuntary commitment and allowing state hospitals to discharge patients with nowhere to go were a complete disaster. Indeed, in 1987, 100,000 working-age Americans with mental problems so severe that they could not hold a job were homeless. 37 On an individual basis, however, there is some merit to this claim. Clinicians who examine the homeless today "usually conclude that about a third have 'severe' mental disorders."38 People with these types of disorders may break off contact with the mental health system and friends and relatives who helped them deal with public agencies. In addition, they are usually incapable of finding work, receiving their social benefits, and generally dealing with the myriad of complex issues that are thrown up by homelessness. As a result, the argument goes, while structural forces may have thrown mental patients into the streets, their mental illness certainly contributed to the rise of homelessness in the 1 980s by keeping them permanently bound there.

    Third, some attribute contemporary homelessness to the increase in dysfunctional and single, female headed households. As Jennings notes, "clearly a relationship exists between poverty status and family structure."39 Precisely what this relationship is, however, is somewhat unclear. For instance, Mary Jo Bane suggests that "an analysis of the reasons for the increased feminization of poverty suggests that about 40 percent of the increase is accounted for by changes in relative poverty rates while about 60 percent by changes in population composition."40 Indeed, less "than half of the poverty of female-headed and single person households and therefore only about a quarter to a fifth of all poverty appears to have come about simultaneously with changes in household composition."41 Moreover, the National Academy of Science's Commission on the Status of Blacks in America suggests that rather than the family structure, "it is low earnings that have led to increased poverty since the l970s."42 This suggests that family composition changes in the 1980s made only a trivial contribution to the increase in poverty.

  • Jencks, 37-38
  • Jencks, 24
  • Jennings, 69
  • Jennings, 69
  • Jennings, 69
  • Jennings, 70
  • And yet, many studies show that "female-headed households have a greater chance of becoming poor than married-couple families."43 In addition, women and children comprise the fastest growing group among the homeless population in the nation. It is clear, therefore, that the increase in female headed households over the last twenty years has, at least to some extent, been a contributing factor to the increase in the rate of homelessness in America.

    And fourth, some social commentators cite a "culture of poverty" among certain segments of the lower class American population as a central reason for the growth of homelessness in America. Ironically, this argument arose out of a structural analysis of the conditions of poverty in the 1960s. However, it came to represent the idea that poor people are inherently apathetic, alienated, lazy, unambitious, and especially, disorganized and fatalistic due to the circumstances in which they live. Moreover, this culture of poverty is familial and intergenerational. This view posits that these inherent traits are the primary reasons why poor people fall into homelessness. By extension, this argument implies that the homeless themselves are primarily responsible for their contemporary predicament.

    43 Jennings, 69

    In reality, these individual inadequacies and short-comings must be analyzed carefully. While many of these traits do characterize the homeless population, it is often difficult to discern whether or not they are the cause or the actual product of homelessness. Moreover, in many cases they are necessary but not sufficient elements to throw people into homelessness. Indeed, the presence of an unstable structural environment is usually the key factor in determining whether or not a poor person is at risk of becoming homeless. As the Home Base Report notes, "in a landscape where insufficient incomes and unaffordable housing prevail, individuals become homeless when an unexpected financial setback, illness or personal crisis occurs. Once homeless, people are faced with a new and overwhelming set of obstacles."44

    Moreover, there are a wide array of different sub-groups within the homeless population in general. These include the mentally ill, alcohol or drug addicted, female heads of single households, children, runaway youth, veterans, elderly, families, and some of the working poor. As a result, the degree to which structural or individual factors play the decisive role in determining a person's homelessness varies greatly depending upon the particular case in question. Therefore, no wide-ranging, universal conclusions can be drawn about the relative contribution of structural or individual factors to the rise of homelessness over the last twenty years. However, it can definitely be stated that the two factors have been inexorably linked together in causing homelessness, and have re-enforced each other over the past twenty years in sustaining poverty and homelessness in the American context.

    44 Homebase Report, 41

    In regards to the current condition of the homeless, Carol Canton notes that the "conditions in present day shelters, particularly in urban centers, have been described as overcrowded, oppressive, dangerous, unhealthy, and similar to nineteenth-century almshouses and the worst of public mental institutions."45 Moreover, temporary shelters hastily "created from armories, church basements, and school gymnastics often lack privacy because sleeping areas are open and communal.. and tens or hundreds may sleep in a single large room.',46 Many of the lavatory facilities are also usually inadequate to handle large crowds, and often shelter guests "must leave the premises for meals."

    And yet, there are also a considerable number of shelters which offer more than just a bed to the homeless and require a significant amount of reciprocal effort out of their residents. For instance, the majority (75 percent) of shelters restrict admission to certain segments of the homeless population while offering some potential services to their residents. In addition, most shelters "screen out medical and psychiatric emergencies, referring such persons directly to a hospital."47 Most shelters also impose some limit on the length of stay, and many set their own rules and "turn away people who cannot or will not conform to those rules."48

    The model that some of the newer and more comprehensive shelters have chosen and the consequences that have resulted from that choice (i.e., vacancy and a high turnover rate), reflect the dilemma inherent in these two different shelter realities. As Jencks suggests, "a congregate shelter that admits everyone will scare away many of its potential clients. However, a congregate shelter that makes strict rules will also drive away many of its potential clients because many find such rules patronizing, difficult to follow, or both."49 Moving beyond this problem is difficult, and it is not clear that the stricter model per se will be able to overcome this complex predicament.

    This dilemma ultimately speaks to one of the central issues of contemporary homelessness in America. That is, what should be the goal of policies aimed at dealing with homelessness in America, and what are the most effective methods of achieving that goal? While ultimately there is no "right" answer to these questions given the diverse causes and needs of the homeless population, any significant progress in resolving them depends upon a collective response on the part of all American citizens. Only in this way will it be possible to truly provide the type of social activism and national "continuum of care" that is necessary to combat the continuing problem of homelessness in America today.

    1. Carol L.M. Canton, "Crisis Shelter and Housing Programs," Homeless in America eds., Carol L.M. Canton (New York: Oxford University Press, 1990), 114
    2. Canton, 115
    3. Canton, 112
    4. Jencks, 108
    5. Jencks, 109


    Works Cited

    Canton, Carol L.M. "Crisis Shelter and Housing Programs," Homeless in America eds., Carol L.M. Canton. New York: Oxford University Press, 1990.

    Homebase Report. Homelessness in the Bay Area: Transform Basic Causes - Meet Human Needs. The Center for Common Concerns, 1994.

    Jencks, Christopher. The Homeless. Cambridge: Harvard University Press, 1994.

    Jennings, James. Understanding the Nature of Poverty in Urban America. Westport: Praeger.

    Patterson, James T. America's Struggle Against Poverty: 1900-1994. Carnbridge: Harvard University Press, 1994.

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