Slate's got an article on the upside -- to a city -- of having squatters move into empty buildings. The beautiful, gigantic Victorian brick office-building next to my flat in east London was recently squatted by what seem like nice enough people (except for that one Sunday morning they got drunk, stood on the roof, and had a shouted coversation with someone on the street below, right outside the bedroom window!). I tell myself that at least they're not junkies or arsonists -- and it's better than living on a street with no neighbors.
Squatting, or unlawfully occupying and making use of land that belongs to someone else, tends to emerge when poverty and homelessness intersect with absentee ownership. It was widespread on the frontier of the 19th-century West, where settlers who couldn't afford to purchase land at market prices often simply occupied land owned by Eastern speculators (as well as land owned by the federal government and by Native American tribes).
From the point of view of local officials, this was a win-win, of a sort. Far-away owners were more interested in free-riding on rising property values, and flipping their land, than in developing it productively. So they resisted paying property taxes or investing in infrastructure. As a result, governments in the West were happy to lend squatters a hand in their efforts to get property out of the speculators' hands. Local governments frequently made it easier for squatters to obtain title through the legal doctrine of adverse possession (sometimes colloquially called "squatters rights")–for example, by shortening the time period required for squatting to mature into ownership. Ultimately, even the federal government joined in. After years of using the Army to chase squatters off its lands, Congress decided to create a legal avenue for settlers without money to become landowners: the 1862 Homestead Act.