The Rise of “Contemporary Homelessness” in the 1980’s 

In 1978, HUD’s budget was over $83 billion (in 2004 constant dollars). This level of funding reflected the federal government’s commitment at the time to building, maintaining, and subsidizing affordable housing. These priorities changed in 1981 when Ronald Reagan took office and began the process of dismantling social programs designed to assist the poor, including the federal funding of affordable housing production. By 1983, HUD’s budget had fallen to little more than $18 billion (in 2004 constant dollars), barely more than one-fifth of its previous level. This dramatic reduction had a substantial impact on the work the department could perform, exemplified by the fact that from 1976 to 1982, over 755,000 new public housing units were built but from 1983 to 2007, only 256,000 units were built by HUD. At the same time, rates of homelessness were skyrocketing. Estimates of the number of homeless individuals at this time were subject to similar uncertainties as our present counts and the claims vary between authorities, but multiple sources agree that the size of the homeless population by the late 1980’s had grown to somewhere between 400,000 and 600,000, compared to an estimated 125,000 in 1980. While there are several attributable factors to this increase, including the economic downturn in the 1970s and the deinstitutionalization of the mentally ill, the most direct cause was likely these cutbacks to affordable housing programs.

Along with these reductions in affordable housing funding came the beginning of dramatic increases in housing-related tax expenditures, housing related revenue losses due to preferential provisions of federal tax law. Between 1976 and 2002, housing-related tax expenditures increased by 281% from $32 billion to $121.8 billion. While these expenditures can come in several forms, one of the most well-known is the tax break individuals can receive by deducting the interest on their mortgage (although this has been recently limited). This policy has often been viewed as an effort to encourage homeownership by providing a tax incentive to take out a mortgage and purchase a home rather than rent.

Though the reasons behind the policy are debated, its effects were clear: those who could afford mortgages were allowed to deduct large sums from their tax payments, with high-interest mortgage holders receiving the largest deductions, while low-income renters were left to rely on diminishing HUD funding. In an interview with Mark Hovath, Paul Boden, an executive director of the Western Regional Advocacy Project (WRAP), described the basic principle and the reasons he believed underlie it: “We are going to triple our home ownership housing subsidies and eliminate our poor people’s housing subsidies because one is charity and therefore there’s no profit for corporate America. The other benefits the mortgage industries, the banks and the construction industry.”

Comparison of Federal Tax Expenditures on Home Ownership and HUD Budget Authority

The final nail in the proverbial coffin was how the government chose to respond at the outset of this homelessness crisis. By 1983, the rise in homelessness had become difficult for Congress to ignore and they responded by establishing the Interagency Task Force on Food and Shelter for the Homeless and authorizing $140 million for the Emergency Food and Shelter Program to be run by the Federal Emergency Management Agency.

This initial response set the stage for future government interventions that focused on small-scale funding for shelter initiatives rather than addressing the underlying cause of the crisis, the systemic need for affordable housing. The trend of institutionalizing shelter systems was further cemented by the passage of the Stewart B. McKinney Act in 1987 which authorized around $1 billion in its first two years that focused on providing funding to shelter systems with small portions going to transitional housing and mobile health care programs. At the same time, federal funding of HUD’s low-income affordable housing programs continued to be cut in much larger sums. Thus, our modern method of addressing the effects of homelessness instead of its causes was born and the era of “contemporary homelessness” began.

This initial response set the stage for future government interventions that focused on small-scale funding for shelter initiatives rather than addressing the underlying cause of the crisis, the systemic need for affordable housing.

The emergence of “contemporary homelessness” in the 1980s has created systems, institutions and practices that have persisted for nearly 40 years, with only incremental change being achieved along the way. The number of homeless individuals in the country is virtually unchanged from the estimates provided in the late 1980s. It is clear that the homelessness crisis has continued in much the same way over the decades, but it is less clear what motivated Reagan and other government officials to pursue the actions that precipitated this crisis and to respond to it in the ways that they did. 

“Contemporary Homelessness” and Corporate Interests

The changes in governmental priorities and funding of social programs in the 1980s that led to “contemporary homelessness” can be seen as part of broader trends that accompanied the rise of neoliberalism in the 1970s. Stemming in part from the economic recession and high levels of stagflation occurring in the 1970s, neoliberalism was a new ideology and policy model that emphasized the value of free market competition and minimal state intervention in economic and social affairs. Embraced by national leaders like Reagan, neoliberalism brought corporate interests to the forefront of American society. 

The connection between the rise of neoliberalism in American governance and “contemporary homelessness” was a feature of my interview with Paul Boden. His organization, WRAP, works to “expose and eliminate the root causes of homelessness and poverty, empower communities to demand protection of civil and human rights, and advocate for restoring federal funding for affordable housing.” In a wide-ranging conversation, we discussed the ways in which the modern homelessness crisis developed and the challenges he and other organizers have encountered when trying to make meaningful change in legal and legislative environments.

To Paul, the “Reagan revolution” was equivalent to institutionalizing neoliberalism within American society. This institutionalization impacted governmental priorities and influenced the ways the federal government viewed certain actions, perhaps best exemplified by the differing attitudes and policies between housing-related tax expenditures and housing subsidies like section 8 vouchers. In Paul’s view, the tax breaks offered through housing-related tax expenditures are “as much of a housing subsidy as a section 8 voucher”:

“They’re both expenditures of resources at the federal level, but the one that’s called economic stimulus is almost $200 billion a year. And there’s no waiting list, there’s no intake, there’s no priority category. Every single person who qualifies for that subsidy, that tax break, every single eligible applicant gets the funding. It’s not even a line item in a budget. If you are qualified for the tax break, you get it. And when we talk about affordable housing or housing subsidies for poor people, it’s a whole different ballgame. And yet that program’s $37 billion a year. So we’re spending an eighth of the money for those guys, and we have whole bureaucracies and think tanks and interagency councils and federal regulations and guidelines and priority categories for people’s ability to access those funding programs, those housing programs. And it’s $37 billion that we’re allocating to it. And yet the one that is overwhelmingly more expensive to us as a country is everybody that’s eligible gets it. No questions asked.”

While this difference in treatment and funding likely has various justifications offered by legislators, the effect has been a clear benefit to the mortgage and construction industries that profit from homeowners who take advantage of these housing-related tax expenditures. The interests of these industries and other corporate actors have arguably been among those best served by these expenditure increases, generally at the expense of departments like HUD and the social services they provide to vulnerable populations. Whether this was directly motivated by a desire to enrich these industries or was a consequence of other considerations, this seems to be an instance of corporate interests being valued above those of low-income groups.

The interests of these industries and other corporate actors have arguably been among those best served by these expenditure increases, generally at the expense of departments like HUD and the social services they provide to vulnerable populations.

The influence of corporate interests can also be seen in the ways in which we conceptualize and talk about homelessness. In efforts to push back against regulations and consumer protection efforts, corporate actors have often emphasized consumer choice, framing decisions to use their products as an individual decision without consideration of the external factors that may motivate consumers behavior. This tendency to ignore the external, systemic factors that may motivate people and individualize actors has also been a prominent feature in discussions around homelessness and has influenced public perceptions of the causes behind the crisis.

In a poll conducted last year by YouGov, an international research and analytics group, of Americans attitudes on homelessness, a majority of respondents considered four factors to be major causes of homelessness: drug and alcohol addiction (66%), mental illness (60%), poverty (58%), and lack of affordable housing (57%). Though these findings show some weight given to external factors like the affordable housing stock, they also reflect a focus on individual deficiencies when considering what may have caused someone to become unsheltered. This individualization of homelessness has impacted the ways governments have responded to the crisis, especially in their use of punitive measures, and has contributed to broader changes in the legal resources accessible to homeless individuals and other low-income people.

Similar to the way that corporate actors emphasize consumer choice to shield themselves from liability, these policymakers seem to focus on presenting homeless individuals as deviant criminals to shield themselves from accountability for creating the systemic factors that put them in that position.

To address homelessness, many localities have enacted laws and employed police tactics that target homeless individuals and criminalize their behavior. According to the National Coalition for the Homeless, this criminalization of homelessness includes “measures that prohibit life-sustaining activities such as sleeping/camping, eating, sitting, and/or asking for money/resources in public spaces.” It seems difficult to imagine how policing such activities would help to combat homelessness, as enforcement seems likely to contribute to the factors that led individuals to become homeless in the first place. In reality, these punitive policies are attempting to address homelessness by removing it from the public eye, operating under the fallacy that “homelessness is fixed when we no longer see it.”

This approach is argued to be largely driven by the concerns of business interests, who complain that visible homelessness reduces consumer sales and the attraction of new companies, and is often supported by residents who feel uncomfortable seeing extreme human poverty. The line of thinking has also been employed by national leaders like Bush’s homeless czar, Philip Mangano, who “honestly believed that if he could make homelessness disappear in downtown corridors … then people would feel that we were making progress addressing homelessness.” Beyond fundamentally misunderstanding what “solving” homelessness looks like, the proponents of criminalization embrace the false premise that “if you hit a homeless person hard enough, or issue a big enough fine and then jail them when they don’t have the money to pay, then that person will stop wanting to be poor and will stop having nowhere to sleep.” Similar to the way that corporate actors emphasize consumer choice to shield themselves from liability, these policymakers seem to focus on presenting homeless individuals as deviant criminals to shield themselves from accountability for creating the systemic factors that put them in that position.

The effects of these punitive policies, as well as other injustices experienced by homeless individuals, have been exacerbated by changes that have been made to the Legal Services Corporation (LSC). Established in 1974 by Congress, LSC is a publicly funded, 501(c)(3) corporation that “provides grants for high-quality civil legal assistance to low-income Americans” and “distributes more than 90 percent of its total funding to 132 independent nonprofit legal aid programs with more than 800 offices.”

Like many other social programs in the 1980s, the Reagan administration attempted to dismantle it upon taking office. Their initial proposal to eliminate federal financing of the corporation was rejected by the House Judiciary Committee, but they were successful in reducing financing to the corporation (from $321 million to $260 million) and placing restrictions on federally financed legal aid lawyers. Among these restrictions was a limitation on class action lawsuits, a feature that was reinforced in 1996 when Congress completely prohibited LSC grant recipients from initiating or participating in class action lawsuits. This change affected the ability of homeless advocacy organizations and the individuals they help to access legal resources capable of making large-scale differences. As explained by Paul Boden:

“[W]hen you talk systemically, you’ve gotta look at the LSC cuts under the Reagan administration. Cause that’s really changed the Legal Services Corporation funding. And that’s the federal funding that a lot of these [legal aid] groups rely on for their existence. That really dramatically changed impact litigation procedures and ability to do it. And it goes back to the neoliberal mindset around poverty. Well, if you’re a legal provider to poor people, you can only focus on the individual poor person’s situation. You can’t do class action. You can’t do impact litigation. You know, because you’re a charity.”

By effectively denying homeless groups and organizations the chance to pursue class action litigation, the challenges faced by homeless individuals can be presented as isolated, singular occurrences that stem from their personal decisions or misfortune. This individualization allows government actors to ignore systemic factors and to perpetuate the idea that addressing homelessness begins with individual intervention efforts rather than large-scale investments in affordable housing.

By effectively denying homeless groups and organizations the chance to pursue class action litigation, the challenges faced by homeless individuals can be presented as isolated, singular occurrences that stem from their personal decisions or misfortune.

Though there are several factors that likely motivated the policy decisions which created contemporary homelessness, the influence of corporate interests and ideals within the neoliberal framework that was emerging at the time cannot be understated. Under this new system that placed so much emphasis on free market competition and the minimization of state intervention, proposals like cutting HUD’s funding while increasing housing-related tax expenditures and responding to rising homelessness with the stop-gap measure of funding shelter systems instead of affordable housing received support and became law. Additionally, the harmful systemic effects of these policy decisions were hidden and ignored by adopting the corporate strategy of emphasizing factors like choice and individual decisions. 

Conclusion

The convergence of corporate interests and neoliberal ideals with governmental priorities and practices has been ever-present over the past 40 years in nearly every area of American life and has likely played a major role in maintaining the policies that created our current homelessness crisis. This article only briefly touches on the possible connections between the rise of contemporary homelessness and the elevation of corporate interests in the 1980s, and how these specific factors have persisted in the subsequent decades.

While there have been important developments and proposals since the advent of contemporary homelessness—such as the Clinton administration’s HOPE VI Program, which resulted in the permanent loss of large amounts of guaranteed affordable housing—that have perpetuated and contributed to modern homelessness, the scope of this investigation was intentionally limited to examine the origins of our current crisis. By understanding the role of corporate interests in the implementation of the policies that created “contemporary homelessness,” as well as the strategies government actors have adopted to escape accountability for these decisions, we can recognize when future efforts to address homelessness are being similarly influenced.