HOMELESSNESS AND THE INFORMAL SECTOR: WHY HOMELESS PEOPLE CHOOSE INFORMALITY OVER FORMALITY
When we think of informality we often think of developing countries, a world far removed from us in the United States brimming with widespread poverty and crime. Our stereotype of informality does have a ring of truth to it. Developing countries tend to be impoverished with small formal economies, so its people need to sustain themselves in other ways such as underground economies or informal housing. However, the United States also has a vast network of informality and just has a huge wealth disparity there are millions in poverty who rely on informality to survive.
Homeless people, like informality, are mostly invisible to us middle class Americans, partly because they rely on informality so much themselves. Homeless people are a major part of an informal underworld, one of the many types of people who cannot access the formal sector to survive. I see this reality every Monday and Thursday when I leave return home from class. The Columbus Circle area is one of the most opulent and formal areas in all New York City, sporting the Trump Hotel and Time Warner Center Mall, yet I see no less than three homeless people on the street. They are almost always sleeping huddled on a street corner, wrapped in a thick sleeping bag, and sometimes huddled in pairs. They always sleep beside their backpacks and large carts, which probably contain everything they own.
Homeless people use informality in three major ways. First, they live in informal housing such as tent cities, colonias, and underground communities. Second, they earn money in the informal economy or street economy through such means as panhandling, prostitution, drug dealing, and selling stolen objects. It is not uncommon for homeless people to work both formal and informal jobs to support themselves. Third, they seek medical treatment through informal medicine such as local healing communities, unorthodox medicine like herbalism, and non-profit groups such as volunteer nurses and church groups providing free services.
However, I do not only wish to write a sympathetic essay about how much poverty and suffering homeless people endure. Researchers, professors, journalists, and graduate students have done so countless times before me. As important as it is to empathize with homeless people empathy by itself does not give a lot of insight into why people become homeless and what to do about. Furthermore, empathy by itself cannot examine the choices homeless people make in their lives. Why do homeless people willingly choose the informal sector? Why do homeless people set up tents in the woods instead of going to a shelter? Why do homeless people choose to panhandle or prostitute instead of getting a “normal” job? Why do homeless people take herbs or homeopathy instead of going to the hospital?
Homeless people, like all of us, make many critical decisions in their lives such as where to live, how to make money, and how to treat themselves when they get sick. Though they act for many different reasons they choose the informal sector for three overarching reasons. Homeless people desire to claim some measure of control over their lives in a situation that easily makes even the most stalwart person feel powerless. Rather than submitting to formal beuracracies such as a homeless shelter or become a low-level employee in a corporation like McDonald’s, they can use their own power to better themselves and form a strong community in the process. They can build houses in colonias, for example, or form a community to provide themselves with medicines they otherwise could not get.
Homeless people also desire a means to escape their situation and the society that largly ignores or despises them. By living in tent cities or underground communities, homeless people choose to fall off the grid of the formal sector. In the process they protect themselves from both the cruel streets and the ravages of law enforcement. It is a way to get out of being stuck between a rock and a hard place. Homeless youth in particular are more idealistic in this regard, rejecting mainstream society more out of principle. By rejecting formal medicine for herbs, meditation, and other “New Age” treatment, they live by an alternative or counterculture lifestyle.
A final but very pressing reason is that homeless people have no other choice. Some homeless people are too sick and have mental illnesses and drug addictions preventing them from getting a formal job. They could have a jail record that bars them from the formal sector. Even being homeless itself marks them for prejudice. Homeless youth go into drug dealing or prostitution because adult criminals took advantage of their vulnerability and coerced them into joining illegal businesses. Homeless adults addicted to drugs flee underground to avoid arrest from the police. Whether homeless people willingly try to take control of their lives or are passively reacting to pressures against them, they are measures taken to survive in a desperate situation and dangerous environments.
Homeless people frequently live in some informal housing or another. Some live in tents, either alone or in communities known as tent cities or colonias. Others live in underground communities, gaining the name of “mole people”. The homeless people who prefer to live in tent cities do so for many different reasons but the main motives are security, escape, and independence. Many homeless people opt out of living in a shelter or the streets because of the violence that often occurs in both. Others still see the tent city or colonia an opportunity for independence, a way of providing for themselves by building their own communities and infrastructure without depending on shelters or welfare. Others escape underground to flee from the police or from family to feed their drug addictions. Frequently, as in the case of tent cities and colonias, homeless people find a strong community of fellow human beings, countering the isolation and invisibility homelessness and extreme poverty bring.
For example, those in Harlem live in tent cities to avoid the violence frequent in homeless shelters, a common reason for many who are homeless. Others in Harlem live in tent cities out of necessity. They would prefer to live in abandoned buildings or empty apartments and while 24,000 apartments exist in standing buildings in New York City, they are kept empty by developers because of real estate prices.
Homeless people do not have an easy life, whether they live in a shelter or in informal housing. Why do they choose informal housing over the shelter and other places? Why do they leave the formal sector to live under the radar in a first world underworld? Homeless people reject the formal shelter for many different reasons, but ultimately it mostly has to do with security and escape. Some see the shelters as disorderly and violent. During my second day volunteering at Rescue Mission, I talked to a volunteer who used to work at other shelters. He said they were poor places to live, had poor people, and had violent homeless people. They were so violent homeless people would even murder the people who worked at the shelter.
Some homeless people prefer living in abandoned buildings or empty apartments but those places are denied them. Living in abandoned buildings is a crime and developers forbid homeless people from living in empty apartments. Abandoned buildings tend to be in blighted areas where peace is no certainty. All sorts of other people such as criminals or drug addicts may occupy abandoned buildings.”You never know who’s going to come into one of those buildings,” the police officer Lloyd said in a journalist’s interview. Amanda Erickson from Business Insider explains that banks simply do not want to pay property tax bills on abandoned apartments while the city wants to use private developers to buy and refurbish abandoned buildings.
Though informal dwellings such as tent cities located in the fringes of society, even considered blight by citizens and developers as slums once were, they have existed for a long time. For example, the Hoboken shanty houses, located between New Jersey and Union City have about fifty people in them who have been around for around twenty years.  Meanwhile colonias in Texas have existed since 1970 and have grown since, interacting with the government and city developers in the formal sector throughout its development.
Tent cities provide some benefits to the people who live in them. Though infrastructure in tent cities such as showers, heating, and electricity are worse than those in formal houses they are relatively cheap. Tent cities in California cost at most $60 per person per month while housing one homeless person in a shelter costs $1,634 per month. Homeless people who live in tent cities enjoy a level of autonomy, stability, and security they may not if they went to a violent shelter or remained on the streets. They are also protected from many other hills from living in the streets. Housing codes, zoning laws, and local ordinances plagued inner cities since World War II, breaking down less affluent communities, sinking them into deeper poverty while isolating them from basic needs such as hospitals and grocery stores with healthy food.
Generally, tent cities exist in the middle of the formal-informal spectrum, the most formal being conventional housing and homeless shelters, the least formal being nomadic and underground communities. Depending on the specific town and state, some tent cities receive support from government and churches, a place where the informal and formal sectors meet, while others are destroyed, banishing the people who live in them further from society. Anti-camping ordinances are most severe where tent cities can potentially cross into the formal sector, such as in commercial, industrial, or recreational zones. Developers, both government and private, see the tent cities as blights, hazards, and nuisances similar to the way they regarded slums in the inner city in the first half of the 20th century.
Colonias are the close relative of tent cities, a network of informal housing that mostly exists in Texas and Arizona near the Mexican border. Since at least 1970, homeless people and other people struggling to make a living have lived in colonias as a king of self-help settlements. According to the Urban Studies journal, people live in colonias for reasons especially relevant to real estate and employment. Their low incomes and poor credit rating make it hard for them to cross into formal financing while the depressed housing market makes it hard for even people with decent incomes to get a home.
Unlike tent cities, colonias have a more complicated evolution and a involved relationship with the formal sector. Originally colonias started as shacks without any basic services, but over time they developed into a more cohesive community as people built their own houses with a self-help ethos. Also unlike tent cities, colonias offer a modest capacity for upward mobility. Since 1970, the state governments of Texas and Arizona became involved with the colonias. Over time the informal and formal sectors formed a mutual relationship of sorts, aiding the colonia residents with land-titles and infrastructure regulation. As colonia houses grew larger and more interconnected, focus shifted away from building larger houses to internal repairs.
Government assistance to colonias and self-help produced at least a few good results. By 2002, all ten colonias in Starr County, Texas had basic utility services such as water, electricity, and septic systems. By 2010, half of all people living in the largest colonia populations had water, sewage, and paving infrastructure. Among the colonia-dwellers in Starr County, 72% of respondents made major home improvements from 2002 to 2011. “32% of respondents having remodeled one or more rooms, 26% and 25% completing flooring and roofing improvements, and between 15% and 18% making improvements to the garden or parking area.” Government assistance of colonias shows that, more than with tent cities, the formal sector shares a symbiotic relationship of sorts with the informal center. Colonias benefit from the government’s support while the government saves a lot of money it would have otherwise spent on homeless shelters and temporary and self-help housing.
Why did colonias make such an improvement and what can it teach us about improving tent cities? One reason lies with the housing consolidation process. Total property values increased more than 30%, which made colonia people richer and had more money to spend on improving their infrastructure. Furthermore, by 2002 most colonias were already finished with their “building-out” stage. With the basic housing numbers and arrangements settled on in the broad sense, they could now focus on improving the infrastructures in their houses and communities.
Sadly, tent cities do not have the same benefits as their colonia counterparts. For one thing, there is the simple fact that they are tents. A tent can almost never provide the same lasting security as a house. Furthermore, people cannot build as lasting of an infrastructure with tents than if they used houses. These barriers prevent tent cities from contacting the formal sector or crossing into it as effectively as a colonia can. In turn, the formal sector such as city governments and private are less likely to respect tent cities as legitimate communities, let alone the right to the city of the people living in them, and instead see them as a pernicious blight in the city that needs to be eliminated. Texas has an organization unique to the state called the Economically Distressed Areas Program, which provides distressed citizens with water planning among other services. Since most colonias are in Texas or near the Mexican border, Texas government can easily aid them.
At times informal housing can manifest itself in extreme ways. If there existed a line with complete formality on one end and complete informality on the other, tent cities would be somewhere in the middle while colonias would be closer to formality. Underground communities are near the end of extreme informality. Here, the “housing” is usually a deep network of subway and sewage tunnels underneath major cities like New York and Las Vegas. The people who live deep underground are called “mole people” and are invisible even to many of the homeless. They are the outcasts of the outcasts.
Underground homeless people do not have any infrastructure and have not even the benefits of tent cities and colonias. With no money or access to any food stores they must hunt their food themselves, hunting down rats, or “track rabbits” as they are called, and cooking them over a campfire. Though underground people seem very different from the rest of the homeless population they are similar to other homeless people who choose to live in informal housing. They go underground to escape the cruel streets where crime menaces on one end and the police punish them in another. Some simply escape from the law to abuse drugs in peace. Others escape society out of “shame” of their poverty.
If homelessness is a condition the portrait of the underground person is homelessness taken to its extreme. Among underground people, 95% of them are men ages twenty to forty-five while 80% of them mentally ill or chemically dependent. Though an underground person can be very aggressive, especially to police, they are usually slow and wary due to fatigue and drugs. The police see underground people as so far gone from formal society they are completely irretrievable.
Nevertheless, attempts were made to rehabilitate underground people. According to Officer Romero, as recorded by the author, Jennifer Toth, underground people were first reported in the seventies. By 1989, about 5,000 people lived in the Bowery subway tunnels. From 1990 to 1991, a huge campaign in New York City ejected a total of 11,000 underground people and put them in shelters. Such measures are drastic but they are potentially life-saving. The average underground person’s lifespan is only three to five years. An underground person’s life is fraught with malnourishment, and danger of drug overdose and disastrous subway accidents. A host of diseases pose a threat underground, the most notorious being AIDS, tuberculosis, and pneumonia.
Life underground is not complete isolation. Underground people form small but extremely tight communities where everyone knows each other and watches each other’s back. Children adapt better than adults underground, even to the point where they find crowds of people frightening. However, underground people on average disapprove of families because they do not want children to be in an environment where mortality rate underground is so high, and so they notify the family to police in spite of police brutality being worse underground than aboveground.
The Rotunda Community, located near the Hudson River, is a homeless community with a family-like structure. Workers of the Parks Department hold an unspoken agreement with the community; allowing them to live in the area as long as they do not do drugs or alcohol in public. The Rotunda Community share food and clothing amongst themselves, send their sick to the hospital, and are ready to receive them when they come out. They do not bond with each other by sharing each other’s pasts because of the trauma in them. Instead, they connect by sharing the best knowledge of how to survive today.
In spite of the deep bonds they share with each other, there is a deep underlying pessimism. Rarely do any of the people talk or even think about the past and future because they see no point in it. They struggle just to live day-to-day, their society giving them no permanent society. The longer they live in isolation from formal society, the deeper they grow underground, the more isolated they become, the harder it becomes for them to come back to the society aboveground.
 Case, pg. 1
 Case, pg. 2
 Kovner, pg. 2
 Erickson, pgs. 2 and 3
 “Shantytown In Hoboken Hills Houses Nearly 50 Homeless People.”, pgs. 1-2
 Durst and Ward, pg. 2146
 Loftus-Farren, pg. 1041
 Loftus-Farren, pgs. 1042 and 1051
 Loftus-Farren, pg. 1046
Loftus-Farren, pg. 1065
 Durst and Ward, pg. 2147
 Durst and Ward, pg. 2146
 Durst and Ward, pg. 2155
 Durst and Ward, pg. 2145
 Durst and Ward, pg. 2149
 Durst and Ward, pg. 2150
 Durst and Ward, pg. 2151
 “Economically Distressed Areas Program (EDAP).”
 Toth, pg. 29
 Toth, pg. 38
 Toth, pg. 63
 Toth, pg. 57
 Toth, pg. 40
 Toth, pgs. 51-52
 Toth, pg. 41
 Toth, pg. 84
 Toth, pgs. 91-94