'Car Sleepers': US Middle Class Hit By Crisis

The shocking reality of the true cost of the financial crisis on middle-class Americans could sweep thousands of regular families into an 'epidemic' of homelessness.

Charities say the crisis is being ignored as more and more ordinary Americans face losing their homes and being forced to seek emergency shelter.

Amid all the talk of the strength of the US economic recovery, it is those who have traditionally formed the backbone of working America who have been hardest hit.

And many of those middle-class Americans have taken the desperate step of living in their vehicles.

The city of Santa Barbara in California, a legendary playground of the rich and famous, has become a haven for so-called 'car sleepers'.

James Frangella, 45, worked for more than 20 years as a painter and decorator in Illinois but now lives in a 1991 Ford Econoline van.

He told Sky News: "I had my own home and I had a good job and I lost the job, lost my home and never in a million years would a guy like me think he would end up living in a vehicle.

"But here I am and it has been my entire life for four years."

He is one of the lucky ones to have an overnight spot in a council car park.

The Safe Parking programme prevents 'car sleepers' from being fined for breaking a law which bans people from sleeping in vehicles.

The programme provides parking for 150 people every night and, with a lengthening waiting list, organisers are desperate for more spaces.

Nancy Kapp, who runs Safe Parking for the non-profit New Beginnings Counselling Centre, said: "Every day somebody calls me, people who have lost everything.

"The American dream is now the American nightmare. The truth of it is that nobody is acknowledging that this is an issue and this is going to become our epidemic."

At 5am in another Santa Barbara car park, Jami packs up her camper van to leave before commuters arrive to fill the same spaces. Until recently she was living with her family in a large house in Utah.

"Even people who currently have jobs are saying: 'We are just a pay cheque away from your situation'," she said.

"This economy is so difficult and people are drowning and month to month do not know what is going to happen to them.

"They don't know if they are going to end up like this."

The homeless have been drawn to Santa Barbara for decades. Its Mediterranean climate as popular with them as the people in multi-million dollar mansions.

It is estimated as many as 60% of those living on the streets in America sleep in their vehicles.

The number of homeless people in the US went down during the recession thanks to government spending on shelters. The number classified as 'unsheltered' though increased.

That government funding was slashed late last year and it is feared more spending cuts will impact thousands of people who are currently in work over the next decade.

Ms Kapp said: "You have the homeless and then the middle class on top of them. That is a lot of people falling into this crisis."