Chapter 1 explores the role of race and ethnicity in the lives of people who are addicted to crack, heroin, and alcohol and who drift in and out of levels of homelessness. Bourgois and Schonberg describe the interactions between white, Black, and Latinx inhabitants at a majority-white encampment where Frank, Felix (a Latino man and the encampment’s only “honorary” white person), Hogan, Petey, and Scotty are living. When a young Black man named Carter James, or CJ, who smokes crack and drinks alcohol, comes to the encampment, he is welcomed. Initially, CJ is better off than the rest, since he has a legal job as a valet and a place to live with his sister. However, when he quickly loses both his housing and his employment, he becomes more of a taker than a giver in the moral economy. After several other Black people come into the encampment, tensions rise, resulting in white flight—almost all of the white inhabitants form another encampment elsewhere.

Felix, a man whose parents are from Central America, finds himself in a new ethnic space, befriending another Latino man named Vic.