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There was a move over the past few decades to demolish the men's hotels or so-called "flophouses" in the name of higher property values and urban renewal. A high-priced condo is worth more to the real estate industry than a cheap hotel with a "transients welcome" sign is.
The issues are rather complex, there is no one reason but here's how I understand it: 40 years ago somebody could "hit the rails" so to speak and head out west to work on the farms, take temporary mining or construction jobs, etc. When it got too cold they could hop a freight back east to winter up in Chicago and stay in one of the workingmen's hotels on W. Madison, or west to Seattle, or down south to work in Yuma, and so on. If they headed for Chicago or Seattle they could stay all winter in the men's hotel with the money they had saved over the summer working odd jobs and living in "jungles". By and large they were not mentally ill but were people who had fallen through society's cracks and for whatever reason hadn't achieved a middle class lifestyle; those suffering from mental illness were often in state mental institutions. The common term back then wasn't "homeless" or "bum", it was "hobo". "Bums" were those who didn't work, stayed in one place, and were looked down on.
A number of things happened: There was a move to defund the state mental institutions and release those suffering from mental illness. This issue is in itself complex and there were undeniably a lot of abuses that went on in those institutions, however I think the answer was not to turn mentally ill people out on the streets but to reform the institutions and end the abuses. In any case the conservative Republicans in particular (influenced by right-wing Libertarian theorists like Thomas Szasz) led a move to end involuntary institutionalization of the mentally ill, in the name of fiscal conservatism and budget cutting. There was also a lot of support for this among liberals, on civil liberties grounds, and I am pretty much conflicted on this issue myself - the civil liberties issues regarding involuntary institutionalization are genuine concerns. Nonetheless we wound up with a lot of mentally ill people turned out onto the streets, with no way of being able to hold down a job or get off the streets unless they had family members willing and able to take them in.
At the same time real estate interests saw big money to be made in demolishing the old workingmen's hotels/"flophouses" and low-rent apartments, and building high-priced condos, high-rent apartments, shopping centers, business buildings, and so on in their place. This process of gentrification was promoted by chambers of commerce and city leaders on the grounds of "urban renewal", and often by using demagoguery to stir up concerns among suburban whites about nonexistent crime, drug, and prostitution problems that the old low-rent neighborhoods supposedly attracted. The net result was even more people being forced onto the street, because of being priced out of the housing market because of gentrification. These weren't the stereotypical nonworking "bums" at all but the classic traveling worker.
Also starting around 1968-1970 came the advent of politicians touting their "tough on crime" policies, "law and order", and the war on drugs. The prison population in the U.S. today as a result is 10 times what it was in 1970. We have demagogues in political office to blame for this, using "crime" and "drugs" to stir up the indignation of suburban whites and attract their votes, and again the net result is 10 times as many generally unemployable people being turned out onto the streets as we did in 1970 and before. Many of them wind up homeless because of being unable to get a job or an apartment - and turning back to crime (and getting back into prison) is often the only route out of their situation.
Then the Republicans turn around and blame the homeless for their plight. It's a classic case of creating the problem and then blaming the victim, and THAT is why I call them REPUKES.
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