[Hpn] Nationwide - Housing: Examining a Media Myth (about the new homeless) - The Atlantic Monthly - October 1983

H. C. Covington H. C. Covington" <icanamerica@bellsouth.net
Fri, 09 Aug 2002 04:25:16 -0500

Editor's note:

This article appeared in the Atlantic Monthly in October 1983 as an
explanation of a "new problem" in America. The 19th anniversary of the
article finds conditions and descriptions changed very little -
including the discussion of the "new homeless" in the public arena.
Reading this article seems a little like reading today's press stories
about "those called homeless" and many times it is hard to remember
the article was really written 19 years ago.

As you review this, try and remember that estimates of the homeless in
America were between 500,000 and 2 million people per year and today
range from 600 to 800 thousand tonight and 2 to 3 million per year.
Also read this with the knowledge that it was written four years
before the McKinney Homeless Assistance Act was written (1987) and yet
addresses the same or similar issues we face today.

For those of us that have been in the ranks of the homeless and human
service provider agencies over the last 20 to 25 years, the article is
a good refresher course of what it was like in the beginning.  For
those who are entering the battle to End Homelessness in ten years,
the article is a good history lesson of the past 20 years of
activities.  It is a long article.  We hope you will find it as
interesting as we did.

H. C. [Sonny] Covington, Editor
The Homeless Daily News

Housing: Examining a Media Myth

The "new poor" and homeless discovered by the press a few months
ago seem to have vanished; meanwhile, the real poor still need help.
by Gregg Easterbrook - The Atlantic Monthly - October 1983

Early in the winter of 1983, an unsettling story grew to
prominence in American newspapers and on television newscasts:
hundreds of homeless men and women were gathering in tents near
Houston, Texas.

Many among them were not solitary drifters but whole families
driven to destitution. Over a few weeks, media attention on "Tent
City" became so great that dwellers there were compelled to
enlist one of their members as public-relations director, to fend
off microphone-waving interviewers.

Then, one day, a fire destroyed one of the tents, killing a man
inside. The county fire marshal ordered the makeshift city
abandoned, and it was.

The story disappeared. Was this the early warning of a national

Around the time of the Tent City story, newspapers and newscasts
carried reports claiming not only that homelessness was
increasing at an ominous rate but also that it was reaching into
the middle class.

The Los Angeles Times, for example, warned that "the 'new
homeless' are vastly different from those who have populated the
nation's skid rows and tenderloins for the last half-century."

The Boston Globe spoke of the "contemporary homeless," who
embodied a "radical change" from the past.

The New York Times referred to the "new poor"; USA Today to a
"new breed" of homeless people.

A Washington Post headline declared, "Middle Class: New Victims
of Homelessness."

These and other stories seemed to suggest that uncountable
numbers of once-prosperous people would soon be wandering the

The beginnings of the nation's economic recovery may explain why
this has not happened, but there is evidence that it was never
likely to, even in the early winter of 1983, one of the gloomiest
periods of the recession.

Homelessness in this most affluent of countries is an undeniable

Estimates of the number of people left homeless range from half a
million to 2 million nationwide; there are no exact figures,
because those who lack mailing addresses cannot be accurately

In New York City, it is estimated that 50,000 people are
homeless, and there are only 4,500 shelter beds available to
serve them; in Chicago, the estimate is 20,000, and there are
only 1,000 shelter beds; in Phoenix, it is 3,000, and the city
has no shelter beds at all.

The Salvation Army, which generally comes to mind as the
institution most concerned about the homeless, has a total of
28,376 shelter beds nationwide--obviously a scant number in
comparison with the country's need.

In the late fall of 1982 and the winter of 1983, the demand for
these scarce facilities rose at a dramatic rate--in part, no one
doubts, because of the economy.

In Seattle, the emergency-housing department reported a 50
percent increase over 1981 in the demand for shelter, and was
turning hundreds away; in Boston, at least 200 people a night
were sleeping on the floor of the city's biggest shelter because
all the beds were taken.

Shelters across the country experienced similar overflows.

Yet, although the majority of the news reports about homelessness
mentioned these problems, it was the "new homeless" angle--the
idea that middle-class families were being tossed onto the
street--that captured the most attention.

And it is in this emphasis that the reports turn out to be, by
and large, mistaken.

The alarms about middle-class homelessness tended to be based
chiefly on statistics compiled by the Mortgage Bankers
Association of America, the national trade group of mortgage

The MBA's statistics, considered superior to those of any
government-compiled source, are drawn from a quarterly survey of
banks that together hold some 8 million home loans, or roughly a
third of the total 27 million such loans that are institutionally

Mortgage holders are at the core of the middle class.

They have mustered enough economic success to handle the payments
on their houses, but not enough to buy the houses outright; many
live at the edge of their loans.

Through 1982, the MBA's delinquency rate--the percentage of
homeowners behind in their mortgage payments--rose. So, too, did
a much more fearsome statistic: the "foreclosure inventory"--the
percentage of home loans on which a formal foreclosure action has
been taken.

The foreclosure inventory in 1982 was the highest since the

Clearly, many people last year were having problems with their
mortgages. But did the MBA's statistics necessarily portend a
dramatic increase in homelessness?

Though the delinquency rate did worsen, it rose by only a
fraction of a percentage point, from 6.35 percent at the
beginning of 1982 to 5.70 percent at the end.

Moreover, inspection of the MBA's records shows that delinquency
has risen frequently since 1960; for example, at the start of
that year the rate was 2.22 percent, and at the end 2.66

The population has grown by 26 percent since 1960, but over the
same period homeownership expanded by 68 percent; it is not
surprising that people who have trouble affording a mortgage
should have been included in the growing population of buyers.
Nevertheless, the actual foreclosure statistics are not
particularly frightening.

Although this rate was, in truth, higher at the end of 1982 than
at any other time since the Depression, it was only 0.67 percent,
or one in 150 houses.

At the beginning of 1982, the rate was 0.53 percent. In other
words, the perception of a trend toward a new class of homeless
people was based on an overall shift of 0.14 percent.

Foreclosure inventories, like delinquency rates, have been rising
since the 1960s, and they have been high in several years that
were not considered to be periods of economic emergency.

In 1964, for example, the foreclosure inventory was 0.41 percent;
in 1972, it was 0.52 percent.

Of course, if you torture statistics, they will confess to

Stated as "0.67 percent," or "one house in 150," last year's
foreclosure rate does not appear to warrant much concern.

But stated as 180,900 threatened households (0.67 percent of 27
million mortgages), the rate seems dangerous. To put these
figures in perspective, it is necessary to know more.

Few news stories mentioned that the MBA's mortgage survey is
slanted toward government-backed Federal Home Administration and
Veterans' Administration loans. Because FHA loans can be obtained
with a small down payment, and VA loans with no down payment at
all, they traditionally suffer higher delinquency and foreclosure
rates than bank-backed, conventional mortgages. The MBA's
foreclosure inventory on these conventional loans, which make up
the bulk of the country's mortgages, was 0.27 in the first
quarter of 1982 and 0.39 in the last.

Then, too, few stories mentioned that there are more houses in
the U.S. without formal mortgages than with them. The 27 million
outstanding mortgages cover not quite half of the 60 million
single-family houses counted by the Bureau of the Census in

Millions of houses are owned outright; their residents are in no
immediate danger of being displaced. Also, millions of houses are
financed informally by sellers; according to housing experts,
sellers are far less likely than banks to attempt to foreclose on

Most important, few stories mentioned that foreclosures are not
the same as evictions. The MBA speaks of a foreclosure
"inventory" because houses whose mortgages are in foreclosure may
remain in financial or legal snarls for years, during which time
their owners continue in residence. Once the foreclosure starts,
the owner might stall until his or her financial circumstances
improve, re-finance the outstanding debt, or voluntarily sell the
house to recover the investment.

Unfortunately, there is no national statistic on the relationship
between foreclosure and home loss, nor is there any national
statistic on evictions. But Thomas Harter, the MBA's chief
economist, says that his studies indicate that only between 30
and 50 percent of all foreclosures begun are ever seen through.

When the real-estate market is slack, bankers are more likely to
let the owners of houses in foreclosure remain where they are, in
hopes that the bank will eventually receive some payment, than to
throw them out and risk getting nothing because no buyer can be

Of course, someone who voluntarily sells a house to escape
foreclosure is still losing it, and is surely suffering a loss in
standard of living; the owner may even be starting on the
downward spiral toward homelessness, but that fate is still some
way off.

Because the much-cited foreclosure inventory does not necessarily
reflect home loss, some feel that a better measure of the
condition of the middle class is the MBA statistic for
foreclosures that are beginning.

This figure, however, would not have served the "new homeless"
analysis, because it hardly moved in 1982; it was 0.20 percent in
the first quarter and 0.22 percent in the last. In fact, the rate
of new foreclosures was higher during the recession of 1973 and
1974, when it hovered at between 0.24 percent and 0.25 percent,
than it was in 1982. This year, the rate is averaging 0.20

Given the imprecision of the delinquency and foreclosure
statistics, were there other ways to determine whether or not the
"new breed" story was correct? Probably.

One might have been the housing-vacancy rate. If middle-class
people were, in fact, being driven to the streets in unusual
numbers last year, apartments and houses should have been
becoming vacant at a rapid rate. Vacancy statistics, however, do
not show this.

According to the housing division of the Bureau of the Census,
home vacancy at the beginning of 1982 was 1.4 percent, and at the
end it was 1.6 percent. Rental vacancies, likewise, changed
little, beginning the year at 6.3 percent and increasing only to
6.5 percent by the last quarter.

In many cities where homelessness was said to be a special
problem, vacancy rates were even lower: less than one percent for
all dwellings in New York City, and slightly under 2 percent in
Baltimore (where the estimate of homeless people runs as high as
8,000) and in Salt Lake City (with an estimate of 1,000 people

Various surveys conducted by emergency-service agencies in the
fall of 1982 provide no evidence of a surge in the numbers of
middle-class homeless people.

New York City's Human Resources Administration surveyed 681 new
arrivals at city shelters.

Of this group, only 11.7 percent came because they had been
evicted by a landlord, and no one had been evicted as a result of

The Greater Baltimore Shelter Network found that 3.6 percent of
the city's homeless were arriving because of court-ordered
eviction from a house or rental apartment.

The District of Columbia's Department of Human Services found
that only 10 percent of the people in shelters were neither
drawing payments from the federal Aid to Families with Dependent
Children program (the welfare source most closely associated with
painful need) nor eligible for them.

A hearing held last December by the housing subcommittee of the
House Banking Committee, which has jurisdiction over federal
housing law helped to catalyze the profusion of "new homeless"
stories. ............... This was the first congressional hearing
on homelessness since the Depression year of 1933; thus it served
as an obvious (and legitimate) news hook.

The subcommittee presented as witnesses six homeless people, all
from middle-class or near-middle-class backgrounds. Their
testimony, eloquent and desperate, would have touched the hardest
hearts. It became the centerpiece of many of the stories that
played up middle-class home loss.

Through the course of the hearing, the subcommittee also listened
to forty-five expert witnesses--shelter operators, local housing
officials, mayors, Salvation Army officers, community
volunteers--all of them sympathetic to the plight of the

Yet only one of these witnesses professed to believe that
middle-class homelessness was a severe problem, and only a
handful so much as mentioned the subject.

Most spoke mainly of the expansion of homelessness among its
traditional victims: the uneducated, the mentally ill, poor
people who have never known wealth.

The six homeless people who testified before the subcommittee
about their plight were found and persuaded to appear by Mitch
Snyder, a member of Washington's Community for Creative
Non-Violence, a volunteer group that seeks to care for the

Snyder says that he chose those six witnesses precisely because
they were not typical of the homeless--because, owing to their
backgrounds, they were willing and able to express themselves
before Congress.

But in the subsequent press reports, they were treated as
typical. "The middle-class factor was the most attractive media
angle, and everybody picked up on it," a congressional aide
instrumental to the hearing says.

In late winter, as temperatures fell and concern for the homeless
increased, Congress appropriated $100 million in emergency aid,
and the White House announced a new program: it would offer
vacant federal buildings as temporary shelters.

This announcement was a page-one story nationwide.

Soon the Pentagon listed 565 buildings, most of them Army Reserve
facilities in downtown areas, that cities could have largely for
the asking.

Exactly three of the 565 buildings were put into use.

The federal Department of Housing and Urban Development offered
900 structures, and only three of these were taken.

"Most of the cities told us they either didn't have a problem or
didn't want to deal with it," Gerald Kauvar, the director of the
Pentagon shelter effort, says.

Once the weather turned warm, and the economy seemed to improve,
the reports about a homeless wave from the suburbs ceased.

Though the middle class may not be in special jeopardy regarding
a place to live, and though available shelters may be sitting
idle, neither fact ought to suggest that homelessness is not an
intolerable problem. It is.

But to help the homeless, it is necessary to understand who they

Many, of course, are victims of unemployment, though at the
bottom of the job ladder, not on its middle rungs.

Most studies show that the fastest-growing categories of new
arrivals at city shelters are the young and women--groups that
have the hardest time finding jobs in a contracting economy.

For the young of all races and both sexes, the situation is
particularly poignant.

Many are going straight from childhood to street life, with no
hope of a job, much less of a home to lose.

Other homeless people are victims of government neglect and
social-service cutbacks (and some of the cutbacks, it turns out,
are as likely to be sponsored by liberals as by conservatives).

Over the past two decades, many believe, more needy people have
been left to wander the streets as a result of the
"deinstitutionalization" of patients in state mental hospitals
than for any other single reason.

In 1955, 569,000 patients were cared for in state-run mental
hospitals nationwide.

By 1979, the total had fallen to 146,000.

Since 1963, the Veterans Administration has cut back on its
housing of mental patients by 59 percent, to 24,000 patients as
of 1980.

Needless to say, the conditions in most state mental hospitals
have long been dismal.

It was in reaction to their bleakness that liberal politicians
and legal foundations began to demand, via legislation and
lawsuits, that the "warehousing" of indigent mental patients end
and that the nonviolent mentally ill be released.

In this demand, liberals found conservative allies, who favored
the emptying of state hospitals as a way of reducing government
expenses. But while "freedom" has been won for the mentally ill,
it is often only the freedom to shiver on the street.

"It is generally accepted that at least a third of the people now
in city shelters have extensive histories of psychiatric
hospitalization," Kim Hopper, a researcher for the National
Coalition for the Homeless, told the congressional

The chronically mentally ill have little hope of employment; many
have slight awareness of what is going on around them, or even
the capacity to take their medication, assuming some agency has
managed to keep track of them to supply it.

Finally, many of the homeless are victims not of the recession
but of prosperity.

They are outcasts of the urban rebirths of the 1970s, the former
residents of rooming houses, or, as they are called by social
workers, "single-room-occupancy" (SRO) hotels.

When cities began to seek ways to attract the booming travel and
convention industries, they needed space for large new hotels and
convention centers. The developers naturally looked for whatever
low-value property was obtainable, and that was often an SRO.

As a result, in the past decade San Francisco has lost 10,000
residential hotel units to urban renewal; New York has lost
31,000; the number of SRO hotels in Denver dropped from
forty-five in 1976 to seventeen today.

When SROs are demolished, their residents--who can barely afford
to live in them as it is- have no place to go.

As an economic proposition, urban redevelopment makes sense, but,
like many sensible economic propositions, it exacts a social

Community activists are finding themselves painted into a corner,
obliged by their consciences to oppose job-enhancing developments
and to favor the preservation of seedy flophouses.

Groups in Portland, Oregon, for instance, have fought valiantly
against development of the city's run-down Burnside district, a
haven for alcoholics and panhandlers.

The desire to PRESERVE a place like Burnside is nonsensical
unless the interests of the potentially homeless are taken into

Several federal programs to improve SROs and similar poverty-line
dwellings exist, but the renovations are extremely expensive,
considering what they achieve.

The Department of Housing and Urban Development funds projects,
but also demands that all HUD-sponsored work be done to its
specifications, which are generous in intent but restrictive in

HUD typically requires that rehabilitation be "substantial"--that
each new unit have a separate kitchen and bathroom, and other
features to bring it near to a middle-class standard.

The regulations also specify that all federally sponsored work be
done in accord with the Davis-Bacon Act, which generally
stipulates that construction workers be paid at the top of union
wage scales.

As a result, HUD-sponsored rehabilitations cost between $50,000
and $100,000 per unit, while privately administered projects cost
about one tenth as much. HUD recently underwrote the renovation
of an SRO in San Francisco, the Padre Hotel, at a cost of $80,000
per unit.

In the process of meeting HUD codes, the number of units in the
building was reduced from a hundred to forty-one, diminishing the
poverty level housing stock by fifty-nine in the act of
preserving it.

Another SRO hotel, the Aarti, in the same neighborhood of San
Francisco, was improved without federal funds. The Aarti's
renovation cost per unit is $8,000, and the total number of
dwellings in the building will decline by only eight, from fifty
to forty-two.

The Aarti lacks some features of the Padre--for example, it has
common kitchens while the Padre has one per unit--but it is in
other respects the same.

In Portland's Burnside district, one HUD-sponsored SRO renovation
(the Butte Hotel) was granted a waiver from the usual
standards--chiefly, the requirement that a bathroom be installed
in each unit was dropped--and project costs fell from $40,000 to
$9,350 per unit.

Of course, it would be ideal if all public housing could be
improved to achieve HUD's standards, but this would also be
prohibitively expensive.

A by-product of this expense is that nearly all cities report a
shortage of public or low-income housing, and long waiting lists
to enter what housing is available.

"If HUD would loosen the restrictions nationwide, we could save a
vast amount of money and do more for the poor." Bradford Paul,
the director of the North of Market Planning Coalition, a
community group in San Francisco, says.

The Reagan Administration came to office ideologically committed
to the elimination of direct federal funding of public housing.

Instead, the President has favored a system of housing vouchers
(coupons that landlords would redeem as rent, and that, in
theory, would give tenants the ability to choose their own
housing, spurring market competition among landlords in the

"The last thing Reagan people want to do is create an efficient,
government-subsidized construction program, because it would
destroy their rationale for vouchers," Andrew Raubeson, the
director of the Burnside Consortium, in Portland, says.

For fiscal year 1984, the Administration is asking for only 15
percent of what the Ford Administration's last budget stipulated
for housing, and is leaving HUD's rules, which are less
cost-effective, in place.

The provision of public shelters is ultimately a local issue, and
local objectives vary.

Some cities try to meet the problem; others leave it to private
charities, such as church groups and the Salvation Army; many
simply try to shift the problem somewhere else.

When the homeless appear on the streets of Prince George's
County, Maryland, a suburb of Washington, D.C., that operates no
shelters, they are given bus or cab fare and told to go

Phoenix recently "responded" to its growing burden of homeless
people (some of them laid-off midwestern workers who have risked
everything to look for jobs in the Sun Belt) by closing its three
shelters, making it a crime to lie down on city land, and
outlawing the plucking of food from garbage--all moves calculated
to force the homeless elsewhere.

Repelling the homeless is an attractive strategy politically, for
it enables local officials to praise their own thrift and firm
administration of public order while condemning the big spending
welfare bureaucracies of other cities.

At the same time, local officials worry that humane treatment of
the homeless could backfire.

According to Ted Wilson, the mayor of Salt Lake City, communities
fear that if they are the first to give the homeless decent care,
they will quickly become a "blinking light," drawing in
transients from around the nation and compounding existing

(New York is believed to have accomplished just that in the 1960s
when it offered higher welfare benefits than other cities, and,
whether or not the observation is true, it makes local officials

Without some uniform federal legislation to spell out a city's
responsibility for the homeless, Wilson says, most communities
will continue to avert their eyes.

Reporters may have had the purest motives in playing up the
troubles of the middle class, but, at the same time, they helped
to direct the government's efforts to the least urgent part of
the problem.

A bill is advancing through Congress to provide $760 million in
federal loans to help middle class families who are faced with
foreclosure to keep their houses. While this idea has clear
humanitarian and political appeal, the amount involved towers
over the $100 million that Congress gave for the current fiscal
year (and has voted to give again next year) to those who are
truly desperate for shelter.

If Congress passes this bill, it will be following a trend in
federal entitlements--acting in the name of the needy, but
providing the largest share of benefits to those who are
relatively well off.

Congress can find better ways to spend the money. Most cities
have thousands of pieces of property, acquired through tax
foreclosure, that sit rotting and unused.

St. Louis, for example, has 9,000 empty tax-foreclosed dwelling
units; nationwide, HUD owns some 170,000 abandoned dwellings.

It is often said that while a new WPA-like agency might ease
unemployment, there is no work for such an agency to do.

Why not employ a federal work corps to renovate empty buildings
for use as housing?

The program would both create meaningful jobs and make decent
again the communities where most of the unemployed live.

Cities that rejected the Reagan Administration's offer of surplus
federal buildings for use as temporary shelters--a palliative
only--might feel very different about a permanent improvement in
facilities for the poor.

This idea has come before Congress more than once.

Republicans run from it, because of their dread of new federal
initiatives; having established that many federal programs were
foolish, they believe that any social-service task that
Washington undertakes must be wrong.

Democrats run from the idea too, because unions oppose it.

Unions say that anything done by a new WPA would steal work from
their members.

But what work? At the moment, there is hardly any work to steal
in providing housing for those who really need it.

Copyright  1983 by Gregg Easterbrook.  "Housing: Examining a
Media Myth", The Atlantic Monthly, October, 1983, issue., Volume
252, Number 4 (pages 10-24).
source page:

Homeless & Housing Daily News