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The Rise of Homelessness in the 1980s

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The Way Home, a special episode of SoCal Connected, will examine sustainable solutions for ending homelessness, including permanent supportive housing for the 47,000 homeless in Los Angeles. Join us for a Facebook Live discussion, Friday, February 24 at 1:30 p.m. PT and tune in Tuesday, February 28 at 8:00 p.m. PT (see more airdates).​

The following is an excerpt from the Ending Homelessness in Los Angeles (January 2007) report through the Inter-University Consortium Against Homelessness and authored by Jennifer Wolch, Michael Dear, Gary Blasi, Dan Flaming, Paul Tepper, and Paul Koegel with Daniel Warshawsky.

Most people see homelessness as a personal tragedy affecting those who cannot afford the cost of renting or owning a home. But why, in the early 1980s, did so many Americans find themselves homeless? Why did the accumulation of personal tragedies reach epidemic proportions at the same time across the nation?

The answer to these questions is rooted in both large-scale economic and political forces, as well as increasing personal vulnerability. Four interrelated dynamics were at play: declining personal incomes, loss of affordable housing, deep cuts in welfare programs, and a growing number of people facing personal problems that left them at high risk of homelessness.8

Service workers picket
About 75 County Dept. of Children and Family Service workers picket in front of the county's Belvedere regional office on Eastern Ave. in Commerce. The picketers are striking for reduced caseloads and higher wages.  | Photo: Bob Carey/Los Angeles Times via Getty Images


Between 1950 and 1970, during a period of post-war prosperity, the gap between the incomes of rich and poor narrowed. But this trend was reversed in the 1970s, and became entrenched during the 80s in what economists describe the great 'U-turn.' 9 The national economy shifted from manufacturing to service industries, where wages were lower (a process known as 'deindustrialization'). Over three-quarters of the new jobs created during the 1980s were at minimum-wage levels. By 1983, over 15 percent of Americans were living below the poverty line, even though half of them lived in households where at least one person worked.

In Los Angeles County, 75,000 manufacturing jobs were lost between 1978 and 1982. The motion picture industry shrank markedly in the early 1980s, and with the end of the Cold War, employment in defense-dependent industries plummeted (in 1990 alone, almost 20,000 defense-related jobs disappeared in Southern California). At the same time, low-skill, low-wage jobs in nondurable manufacturing and services grew, stimulated by the declining power of labor unions and the increasing availability of low-skill immigrant labor. These shifts polarized the local wage distribution. In part because of these labor market dynamics, the poverty rate in Los Angeles County grew from 8 percent in 1969 to 14 percent by 1987.10

Pruitt Igoe
Am 11-story building in the massive Pruitt Igoe public housing complex is demolished by dynamite April 21, 1972. | Photo: Bettmann / Getty Images


In the decade following 1973, 4.5 million units were removed from the nation's housing stock, half of which was occupied by low-income households. In roughly the same period, over 1 million SRO units were lost, and the nation's public housing program was all but abandoned. It was replaced by the 'Section 8' rent-subsidy program that increased the residential location choice of recipients but only modestly increased the stock of affordable housing. Federal authorizations for housing subsidies amounted to 7 percent of the total budget in 1978; but by the late 1980s this proportion had shrunk to 0.7 percent. At the same time, the rise in single-person households dramatically increased the demand for housing across the nation.

In Los Angeles and Southern California the consequence of these wider trends was a housing affordability crisis of unprecedented proportions. The proportion of households able to afford a median-priced home fell, and between 1974 and 1985, the number of housing units in L.A. County renting for $300 per month or less fell by 42 percent in real terms. In addition, the share of the total housing stock that was affordable fell from 35 percent in 1974 to 16 percent over the following decade. The number of poor renter households grew by 43,000 but the number of units they could technically afford fell by 60,000. Virtually no new public housing units were constructed during the 1980s, and between 1970 and 1989 market-rate housing unit growth in L.A. lagged at half the national rate.11

Richard Nixon
Richard Nixon giving a speech before Congress in Washington, 1971  | Photo: Keystone-France / Contributor / Getty Images


The Nixon era ushered in a restructuring of the welfare state that was continued by all subsequent Republican and Democratic administrations. Driven by ideological commitments to privatization and decentralizing welfare to states and localities, the erosion of public welfare took many forms, but two changes — both of which severely impacted Los Angeles — stand out in terms of the genesis of the 1980s crisis.

The first of these was 'deinstitutionalization,' a plan to empty the asylums treating and housing mentally disabled individuals, which was promoted by both civil libertarians and cost-conscious policy makers.12 In the two decades after 1950, the inmate population of national state and county psychiatric institutions fell from over 1 million to less than 100,000. California's asylum population dropped from over half a million patients to just over 100,000.13 The plan was that deinstitutionalized people would be served by community mental health centers funded by the federal government, but these never materialized in sufficient numbers to address the need. The promise of deinstitutionalization remained unfulfilled. Many former patients ended up on the sidewalks of America, homeless and without care. Today, many of them are in county jails, where they have been joined by people who would have been institutionalized in previous eras.14 Indeed, the Los Angeles County Jail became the nation's largest de facto mental hospital, a warehouse for mentally disabled inmates.15

The second key event was the cut in welfare rolls. Nationwide, between 1982 and 1985, federal programs targeted to the poor were reduced by $57 billion. Because of adjustments to the eligibility requirements, over half the working families on the federal Aid to Families with Dependent Children program (AFDC) were removed from the rolls. In addition, the value of the AFDC payment fell by 25 percent between 1979 and 1983. There was little comfort for families who sought help at the State level: many states had cut their General Assistance (GA) payment in half; some states did not even have such a program. The decline in AFDC and GA payments was a major reason why 20 percent of America's children lived in poverty in the early 1990s, the same proportion as in 1965. In post-Proposition 13 California, welfare payments were effectively cut by repeatedly eliminating cost-of-living adjustments. Workfare programs were instituted that required recipients to work as a condition of ongoing eligibility. And in 1991, the State's minimal AFDC Homeless Assistance Program was cut by 38 percent.

In Los Angeles, high unemployment in the late 1970s and early 1980s increased the welfare rolls, and drastic measures to curtail them were introduced. As a result of State actions, 38,000 recipients were dropped entirely, another 48,000 suffered benefit reductions, almost 8,000 lost food stamps, and about 12,000 AFDC families lost Medi-Cal coverage. Health and mental health funding was cut, along with funding for substance abuse treatment. Lawsuits forced the county to raise its General Assistance monthly payments (locally known as General Relief, or GR) from $228 in 1986 to $341 in 1991. However, this benefit payment was later slashed to $293 and has continued to decrease since then.16

Skid Row
Homeless people rest on a public sidewalk February 28, 2013 in downtown skid row area of Los Angeles, California.  | Photo: Kevork Djansezian / Staff / Getty Images

Personal Vulnerabilities

During the 1980s and 1990s, other factors worked to increase personal vulnerability and expose more people to the risk of homelessness. One was the explosion of crack cocaine usage that created an epidemic of drug abuse and addiction, and unraveled the lives of countless people who became caught up in the drug market either as users, suppliers, or distributors. In Los Angeles County, for example, there were 400,000 cocaine addicts and 200,000 other drug addicts in need of treatment by the late 1980s. An estimated 100,000 of them were homeless or poor. Later, other drugs such as methamphetamines became widespread and were no less destructive of human lives. While demand for treatment and care of addicts skyrocketed, the number of public treatment slots fell in the county. By 1991 over 2,000 substance abusers were on waiting lists for the 5,200 available treatment slots.17

At this time, attitudes toward criminal justice turned away from rehabilitation to punishment. The rise of stricter sentencing and 'three-strikes' laws dramatically increased the number of incarcerated people. In California during the 1980s, the incarcerated population tripled at a time when the State's population grew 30 percent. The trend in Los Angeles County was similar during the early 1980s but rapidly worsened later in the decade.18 Meanwhile, jailhouse programs designed to train ex-offenders and secure employment largely evaporated, and employer willingness to hire ex-offenders was reduced, as reflected in low hiring rates of former inmates.19 The result was a growing population of ex-offenders with little or no rehabilitation or job prospects.

Lastly, the rising cost of health care and rapid growth of the uninsured population meant that many people with medical problems had no recourse to affordable health care. By the early 1990s, 2.7 million people in Los Angeles County lacked health insurance. People often faced a choice between paying for health care or for housing, and as a result frequently found themselves homeless.20

A predictable crisis?

The decline in personal incomes and the squeeze on affordable housing, along with rising rates of personal vulnerability, created in America a broad class of precariously-housed families and individuals who were only a paycheck or two away from eviction. With diminishing prospects of help from cash-starved public welfare agencies, many people lived on the edge, knowing that one more personal setback would precipitate a crisis that could cause the descent into homelessness. Knowing what we know now, how could anyone have been surprised by the rise of homelessness in the US during the 1980s? It was an entirely predictable crisis.


8 A detailed account of these forces is outlined in Jennifer Wolch and Michael Dear, Malign Neglect: Homelessness in an American City. San Francisco: Jossey-Bass (1993).

9 Bennett Harrison and Barry Bluestone. The Great U-Turn. New York: Basic Books (1988).

10 Data on employment shifts and poverty during the 1980s is derived from Jennifer Wolch and Michael Dear, Malign Neglect: Homelessness in an American City. Chapter 1. San Francisco: Jossey-Bass (1993).

11 Information on housing is derived from Jennifer Wolch and Michael Dear, Malign Neglect: Homelessness in an American City. Chapter 2. San Francisco: Jossey-Bass (1993).

12 Michael Dear and Jennifer Wolch, Landscapes of Despair: From Deinstitutionalization to Homelessness. Princeton: Princeton University Press (1987).

13 Jennifer Wolch and Michael Dear, Malign Neglect: Homelessness in an American City, page 9.

14 Jennifer Warren, "Mental Ills Common in Prison, Jails," Los Angeles Times, September 7, 2006, B3; and Steve Lopez, "lnmate is unstable; the System is Just Nuts," Los Angeles Times, December 10, 2006, Bl.

15 The Consensus Project. "Jails and Mental Illness" Factsheet. December 3, 2006,

16 Information on changes in welfare and related social programs during the 1980s is derived from Jennifer Wolch and Michael Dear, Malign Neglect: Homelessness in an American City. Chapter 4. San Francisco: Jossey-Bass (1993).

17 Ibid, p. 134.

18 Franklin E. Zimring and Gordon Hawkins (eds.) Incapacitation: Penal Confinement and the Restraint of Crime. Chapter 6. Oxford University Press (1995).

19 Harry Holzer, Steven Rafael, and Michael A. Stoll, "Employer Demand for Ex-Offenders: Evidence from Los Angeles." Washington, D.C.: Urban Institute. March 2003.

20 Jennifer Wolch and Michael Dear, Malign Neglect: Homelessness in an American City. Chapter 2. San Francisco: Jossey-Bass (1993).

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