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Housing the Homeless

Over the Edge: The Growth of Homelessness in the 1980s

by Martha R. Burt
Russell Sage Foundation and the Urban Institute Press, 267 pp., $16.95 (paper)

A Place to Call Home: The Low Income Housing Crisis Continues Information Service

by Edward Lazere, by Paul Leonard, by Cushing Dolbeare, by Barry Zigas
Center on Budget and Policy Priorities and Low Income Housing, 83 pp., $12.00 (paper)

Tell Them Who I Am: The Lives of Homeless Women

by Elliot Liebow
Free Press, 339 pp., $24.95

The Way Home: A New Direction in Social Policy

by the New York City Commission on the Homeless (Andrew Cuomo, chair)
(unpublished), 118 and appendices pp.

Down and Out in America: The Origins of Homelessness

by Peter H. Rossi
University of Chicago Press, 247 pp., $9.95 (paper)

New Homeless and Old: Community and the Skid Row Hotel

by Charles Hoch, by Robert Slayton
Temple University Press, 299 pp., $19.95 (paper)

When the numbers of homeless people began to increase in the early 1980s, their advocates often blamed the housing market for what was happening. In those years, the homeless were mostly poor single adults, many of whom had traditionally lived in “single room occupancy” (SRO) hotels and rooming houses. Since these SROs had been disappearing, it seemed natural to suppose that many of their former tenants were now homeless. Later in the decade, when the number of homeless families increased, many people who worked with the homeless blamed the growing shortage of cheap apartments—a shortage that they often attributed to cutbacks in federal housing programs.

Of course there are other explanations for increased homelessness. In an earlier article1 I argued that changes in the way we treated the mentally ill, declining demand for unskilled workers, declining rates of marriage among young mothers, declining welfare benefits, and the crack epidemic were among the causes. Here, however, I shall concentrate on the housing market, giving particular attention to the ways that federal and local governments have reshaped the choices available to the very poor, and how we could do better in the future.


During the winter of 1958 a young University of Chicago demographer named Donald Bogue conducted an unusually careful survey of Chicago’s major skid-row neighborhoods.2 He concluded that just over one hundred men typically spent the night in public places, either walking around or dozing in all-night restaurants and movie theaters, while almost a thousand slept in free shelters. (At that time shelters were mostly run by evangelists eager to save lost souls and were known as “missions.”) Using today’s definitions, therefore, about 1,100 people were homeless in Chicago on an average winter night.

In the winter of 1986 Peter Rossi, the author of Down and Out in America, made another early morning survey of Chicago’s shelters and public places. By then about 500 adults were spending the night in public places, while another 1,600 adults and 300 children were in shelters on a typical night. Overall, the city’s homeless population had roughly doubled.

When Bogue did his survey, however, Chicago’s 1,100-odd homeless men made up only a small minority of its skid-row population, most of whom lived in what were politely known as cubicle hotels. These were not SROs in the 1990s sense of the word. They housed their patrons in windowless five- by seven-foot rooms furnished with a bed, a chair, and a bare light bulb. The cubicles were separated by wooden walls and ventilated through wire mesh near the ceiling and floor. They were noisy, usually verminous, and frequently smelled of urine, vomit, or both. Because of the wire mesh and the smells, their patrons called them cage hotels.

Nonetheless, almost all skid-row residents preferred a cubicle in one of these hotels to a bed in a shelter. A cubicle of one’s own provided more privacy and security than a shelter, which housed residents in large dormitory rooms. Cubicle hotels also treated their residents like paying guests rather than charity cases, allowing them to come and go as they pleased, receiving their mail and making no effort to save their souls, improve their character, or regulate their drinking. As a result, Chicago’s cubicle hotels housed about eight times as many people as its missions in 1958.

By 1986 all but two of these hotels were gone, and the two that survived apparently had fewer than six hundred beds. Similar changes had occurred in almost every other major American city. It seems natural to suppose that some of the people who would once have lived in very cheap hotels now live in shelters or in the streets and in doorways.

New Homeless and Old, by Charles Hoch and Robert Slayton, describes how entrepreneurs and politicians destroyed most of Chicago’s cubicle hotels during the 1970s and early 1980s. Most of these hotels were located just west of the Loop. During the 1960s developers began urging the city to use its powers of eminent domain to clear the neighborhood, so they could build upscale housing for well-to-do young people working in the Loop. The city eventually accepted this proposal, and the last cubicle hotels in this part of the city were torn down in the early 1980s.

Because redevelopment eliminated so many cheap rooms so quickly, a temporary shortage was inevitable. But why weren’t they replaced? Virtually everything in Chicago is constantly being torn down, but almost everything profitable reappears elsewhere. Chicago had many empty warehouses that could have been turned into cubicle hotels. That did not happen—not because there was no demand for cheap beds but because the Chicago building code no longer permits construction of such accommodations.

Because new competition was illegal, the handful of cubicle hotels that escaped the bulldozer were apparently able to raise their prices much faster than the general level of inflation. Chicago’s cubicle hotels charged between 50 and 90 cents a night in 1958. By 1992 Chicago had only one such hotel with a listed telephone (the “Wilson Men’s Club Hotel”), and it charged $7.50 a night (or $162 a month). In New York, where similar places are called lodging houses, prices are now comparable. Renting cubicles seems to have become at least eight times more expensive during the past thirty years, even though the Consumer Price Index and the cost of construction only rose by a factor of about four.

Rising prices not only put rented rooms beyond the reach of some people who had once been able to afford them but encouraged others to spend their limited funds differently. In 1958, a cubicle cost less than a six-pack of beer, making privacy cheaper than oblivion. By 1992 a six-pack cost less than half what a cubicle cost, making oblivion cheaper than privacy. The same pattern obtains if we compare the price of a cubicle to the price of cocaine. These changes surely encouraged some people to use free shelters and spend their money on alcohol or crack.

While the destruction of skid-row flophouses certainly did something to spread homelessness, the connection was not as simple as most accounts suggest. Because incomes rose steadily between 1945 and 1974, demand for cheap rooms declined. Run-down flophouses had trouble finding tenants, and many were pulled down to make way for more profitable enterprises. Because the supply of very cheap rooms exceeded demand, politicians found that regulations prohibiting the creation of new flophouses could make the sponsor look virtuous without creating much hardship.

The postwar boom ended in 1974 with the oil embargo. After that, real incomes became stagnant for all but the richest fifth of the population. Starting in 1979, the number of very poor people began to grow. The number of unmarried working-age men with personal incomes below $2,500 climbed from 1.6 million in 1979 to 2.6 million a decade later.3 Among women, the number went from 2.1 to 2.9 million. (Throughout this article, incomes and rents are in 1989 dollars.)

People with such low incomes could seldom afford to rent rooms with windows, closets, or plumbing even in the 1960s. If they could not stay with others or wanted to live alone, a flophouse was their only choice. But by 1979 the old flophouses were almost all gone. The 1980 Census found only 28,000 people living in “low cost transient quarters” that charged less than $4 a night, which seems to have been roughly the upper limit for a cubicle hotel at the time. Thus when more people began looking for cheap beds, they had nowhere to turn except shelters.

Fifteen years have passed since this change began to take place, but many people concerned about the homeless still have not grasped its implications. During the mid–twentieth-century economic boom, which lasted from 1942 to 1974, politicians and much of the public came to see old-fashioned flophouses as substandard and made building them illegal. Now that the boom has long been over and extreme poverty has risen among single adults, demand for such places has risen again. But no one is yet willing to bring back the more permissive code requirements of an earlier and poorer era. Instead of turning back the clock and letting private entrepreneurs try to house the very poor, or going further and subsidizing such entrepreneurs, city governments have opened thousands of free shelters.

I do not mean to suggest that private entrepreneurs could house all of today’s homeless if we gave them a free hand. Big cities have always needed free shelters, and their clientele has always increased when extreme poverty increased, as it did in the 1980s. But restrictive building codes exacerbate the problem. While some of today’s homeless are too poor to rent any space of their own, some could afford cubicles if they were still available at their traditional price.

In 1987, when Martha Burt surveyed homeless people who used soup kitchens or shelters in big cities, two fifths of the adults not accompanied by children reported monthly incomes above $100, and a quarter reported incomes above $200. Had cubicle prices risen at the same rate as other prices between 1958 and 1987, they would have been $40 to $80 a month. A large minority of the homeless might well have rented a cubicle if one had been available at that price in 1987.

Even in their heyday, however, flophouses sheltered only a small proportion of the very poor. Most unmarried adults lived with someone else, because sharing space cost less than living alone. This remains true today. In 1989, renting a room from a non-relative cost about 20 percent less than renting one from a hotel or a rooming house. As a result, the number of unmarried, working-age adults renting space in someone else’s home was five times the number in hotels and rooming houses.

People with tight budgets could cut their costs even further if they rented space together. Hotels and rooming houses typically charged $283 a month for a single room in 1989, while one-bedroom apartments averaged $392 a month, two-bedroom apartments averaged $474, and three-bedroom apartments averaged $494. Thus if three hotel or rooming house residents had moved into a three-bedroom apartment, they would typically have cut their monthly rent from $283 to $158 apiece—a 42 percent saving. They would also have gotten a kitchen, a living room, and a bathroom shared with only two other people—amenities that are by no means universal in hotels or rooming houses.

But while living with others is economical, finding housemates is far from easy, and getting along with them often turns out to be extremely difficult. As a result, some people need to live alone, even if that means paying more rent or settling for worse living conditions. Because living alone is expensive, those who need a room of their own are particularly likely to become homeless. The homeless are mostly unmarried working-age adults with incomes below $5,000. Census surveys show that only a seventh of this group lived alone in 1987. Yet Martha Burt reports in Over the Edge that a third of all homeless adults—some 100,000 to 150,000 people—had lived alone just before becoming homeless. These loners are probably the group least likely to use the shelters created to house the homeless during the 1980s. For some—especially the mentally ill—the lack of privacy in a dormitory shelter is almost unbearable, not to mention the threats of theft and violence. Many prefer abandoned buildings, subways, parks, or even doorways. This is one big reason why roughly half the homeless are not in shelters on any given night.

  1. 1

    The Homeless,” New York Review, April 21, 1994.

  2. 2

    Donald Bogue, Skid Row in American Cities (Community and Family Studies Center, University of Chicago, 1963).

  3. 3

    This and all subsequent numerical estimates come from my book, The Homeless (Harvard University Press, 1994), which also documents their sources.

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