Our era wears a unique shame: Great Depression levels of poverty surrounded by Gilded Age wealth. In 2015, the number of people who slept in New York City shelters broke the 60,000 mark, which includes 25,000 children – and it remains there in 2015, a new record. And that doesn’t count the mass of people who sleep on the street, or in the subway system.

Recently, a new restaurant opened on the Bowery, the street in lower Manhattan which has been synonymous with homelessness in the US since Jacob Riis published How the Other Half Lives 125 years ago. It’s called SRO, a wink toward “single room occupancies”, the buildings that long housed the poor on this street. The restaurant boasts of its “selection of Italian wines curated by a master sommelier”, and serves artisanal pizza laden with merguez and stracchino. You can bet it’s not a buck a slice, which you could have recently paid in this part of town if you could scrape together enough change. I’ve eaten my share of merguez, and drank my share of decent Italian wine. But this moment is a nightmare for the city.

Despite Mayor Bill de Blasio’s campaign to correct New York’s gob-smacking inequality, the number of people in shelters has gone up by 7,000 since he took office – as a result of inherited policies and conditions. Last fall, De Blasio’s Department of Homeless Services promised that 4,000 homeless families would be able move into private apartments by the end of June; by mid-April, only 900 have. And this month, the state budget gave the city just one-third of what the mayor demanded to cover permanent housing units.

After the New York state house approved the inadequate budget, De Blasio announced that he’ll be using city funds to send what he called “Swat teams” (or, officially, the Shelter Repair Squad) into 500 shelters to address their squalid conditions. But fixing up existing shelters does not address the more trenchant, systemic factors contributing to homelessness. This is not just a political issue, but a cultural one. The mayor may be calling for crisis management with these emergency teams, but most New Yorkers don’t see the crisis at all – they simply sidestep bodies on the sidewalk, or refuse to look up from their iPhones when people who never thought their lives would come to this ask for help.

Too many people exist under the assumption that there’s a place for these people, a mechanism to care for them, but usually there isn’t. The state doesn’t engage with them as much as it must – and most New Yorkers don’t either, remaining not just passive in the face of need, but actively shutting it out.

I watch it happen every day. Recently on the 1 train, I talked to a gaunt woman named Kimberly, clad in a massive ski parka and enormous men’s jeans, who couldn’t get a human glance, much less a dollar. During our conversation, a young woman with a blonde blow-out sat across from us, training all her focus on the contents of her Saint Laurent handbag. I saw her refuse to look up from it minutes before, when Kimberly asked her directly for change. All I could do is think about how much that bag cost, while Kimberly told me about a tough interaction she had with a cop earlier in the day. But it’s complicated: I don’t know this young woman’s story, how she may have struggled to get that bag. She resides in the same landscape of material desire as the rest of us in this city.

When I moved here 23 years ago, things already seemed as bad as they could get, with 22,000 people staying warm – if not safe – in city shelters. Around that time, The New York Times ran an average of one story a day on homelessness, according to research from Paul Toro at Wayne State; it was accepted that the US was witnessing a national crisis of top news proportions. Back then, if you had described a restaurant called SRO on the Bowery, tucked into glassy blocks of luxury housing, it would have sounded like a literary flourish in a dystopian scenario. In the 1970s, when modern homelessness began, 250 men would sleep each night on the floor of what was known as the “big room” of the municipal shelter. These days, the shelter is right across the street from the Bowery Hotel where a small room for one is now available for the “best available rate” of $445 a night. “Bowery Hotel” once meant an icon of housing of last resort for the destitute, the definitive flophouse. Now it’s a branding opportunity, a grab for that holiest of marketing gets: authenticity.

In 1992, the year I arrived in Manhattan, there was an 18% decrease in SROs, yielding a new population of homeless people who could previously afford the city’s cheapest, if most squalid, quarters. On upper Broadway, I’d see a guy every day who had been pushed out of his nearby room and had begun sleeping on the street. He panhandled with the rhyme: “What’s the richest nation in the world? Donation! What’s the richest city in the worlds? Generosity!” Over two decades later, he’s still there. But now, he seems increasingly invisible to the wealthy neighborhood residents. It appears the more homeless there are, the less the affluent see them.

Columbia professor Shamus Khan, who studies the sociology of the elite, explains that the rich today believe that they have what he tells me is “a moral responsibility” not to help – or perhaps even engage with – someone suffering in poverty, as “helping them facilitates their current state.” Such thinking merges together with a bias that’s known as the “just world theory,” says Shawn Fremstad, who researches inequality at the Center for American Progress. This is the simple idea that the world is just, full stop. That’s how you can be looking at someone holding out an empty coffee cup and think, as Fremstad tells me: “OK, that’s a homeless person but we live in a just world, so they must have done something wrong.” Fremstad says that this thinking places full responsibility on individuals for their plight instead of looking at structural factors.

This doesn’t just happen in just New York, though this city is a funhouse version of the problem, which exaggerates the upper and lower classes in inhuman forms. Paul Toro, who studies the public’s perception of poverty and homelessness, says: “nations where there’s a higher concentration of wealth have more negative attitudes toward the homeless, and higher rates of homelessness.” Toro’s studies show that countries with more social welfare programs have less homelessness, which comes as no surprise. But beyond that, he says: “there’s this correlation between how sympathetic people are and their rate of homelessness.” He told me the converse is also true: “in nations where there’s a higher concentration of wealth” – and more homelessness – people “have more negative attitudes toward the homeless.” As our inequality grows, we care less about those who have the least.

Here, that shift has occurred under our watch, and Mayor Bloomberg’s. Homelessness increased by 64% in a single decade during his tenure. And between 2012 and late 2014, those two “post-recession” years when luxury housing boomed, the numbers shot up by about 20,000. They’re not numbers, though. They’re people.

They’re the women who occupy the forty beds at the East New York Women’s Shelter, where I recently spent an afternoon. In the recreation room, the residents and I got into a heated game of Cranium. Maryse, who could afford her rent last year, and whose four kids don’t know she’s been homeless since then, and Justine, who is mum about her story, though the scars on her face and her torn earlobes tell of great hardship, were on a team with a volunteer, who pulled a card that said “Sarah Jessica Parker.” Trying to get the two women to guess who it was, she leaped up and cried: “Jimmy Choos! Brunch! New York is fabulous!”

They were utterly puzzled, silent in the face of her effusive charade.

Giving up, and pulling a new card, she tried to explain who Carrie, the actor’s fictional televised character, is. “Never seen her”, grumbled Maryse. More importantly, Maryse, she probably hasn’t seen you either.

Lauren Sandler is an author and journalist who writes mainly about inequality, gender, and politics whose reporting has appeared in Time, The New Republic, The New York Times, The Atlantic and The Guardian, among others.

Co-published with The Guardian.