A gravelly campground off Interstate 40 in central Tennessee is a last refuge for a hodgepodge of Americans: Here you can get a $275-a-month camping spot with a 30-amp electric outlet and a scratchy Wi-Fi signal emanating from “the bathhouse” down the lane.

“It’s my permanent home – for now,” says Terry Lee Ballard, who says he runs a small record label from his “tent condo,” which is replete with “redneck engineering” such as a tent-flap air-conditioning unit.

As cities from Sacramento, Calif., to Tampa, Fla., debate the merits of tent cities to house newly homeless people (many of them young families), this recession is starting to yield scenes that evoke the Great Depression, especially at places like Timberline Campground in Lebanon, Tenn.

Living in well-worn campers and tent compounds overstretched with 20-foot-long tarps, 85 percent of residents here are permanent, a good chunk of them “economic refugees.” It’s an increasingly familiar scene across the country as campgrounds, RV parks, national parks, and city-owned pockets become inundated with permanent campers, and as entire tent cities spring up and expand, with some hinting at permanence by voting on village bylaws.

“It’s not quite Hoovervilles, but it’s getting there,” says Leonard Heumann, a housing policy professor at the University of Illinois at Urbana-Champaign, referencing the massive tent cities and shantytowns erected during the Great Depression.

But the great outdoors is not a last resort just for the cash-strapped: Wal-Mart tent sales are up 36 percent over last year, and campgrounds are reporting a surge in requests for primitive campsites as Americans forgo beach condos to find their inner Thoreau.

At a time of downscaled dreams, it’s a harbinger of how closely many Americans are walking the knife-edge between a roof and a tent flap. But for many, like Tammy Renault, who lives in a tent with a husband and four kids, there’s virtue to be found even in a muddy tent floor.

“This tells you what you’re made of,” says Ms. Renault, a devout Christian whose faith has been steeled, not diminished, by her family’s crisis.

Her story is a snapshot of the American edge: After the family moved to Tennessee, her husband Troy’s contracting business failed. The choice soon became paying the rent or the electric bill. They set up camp here nearly four months ago. The first week of August, three of the four kids started school, with one of them, Ty, waiting at the front of the campground for the school bus.

The National Alliance to End Homelessness (NAEH) estimates that this recession will create 1.5 million new homeless – nearly double the current number. Half of those people will exist outside the shelter system – in cars, tents, campers, or sleeping bags under highway overpasses. (Editor's note: The original version misstated the name of the homelessness alliance.)

With the jobless rate at a 30-year high and a foreclosure wave still sweeping the nation, wait lists for shelters are expanding and laid-off Americans are looking for other options. The rise in long-term tenting and camping is a sign that people’s options are running out, says Nan Roman, president of NAEH.

“When people have choices, they don’t [move] into tent cities,” says Ms. Roman. “They’re very understandably looking for hope and they’re seeking virtue in it, but I think we can do better to help people achieve their potential than tents.”

But in places like Sacramento and Champaign, Ill., that’s exactly the debate. In March, Sac­ra­mento closed a large tent city, even as officials in the Tampa-St. Petersburg area face a proposal to set aside city land for a major homeless tenting area. A group in Champaign is lobbying the city to put up a 60-tent facility. In early August, advocates fought in court to keep open two tent cities – Camp Runamuck II and Hope City – in Rhode Island, but their effort failed. Campers now have an early September deadline to pull up stakes. States are also responding. Alabama recently opened its two largest state campgrounds to permanent campers, partly in response to the poor economy.

While many seem to find romance and even liberation in paring life down to the barest necessities, the prospect of muddy campgrounds, inclement weather, and sparse toilet facilities is, in fact, disheartening, especially to families who are enduring it against their will, says Mr. Heumann.

“There’s all kinds of good or bad solutions that people and families are working on,” he says. “But the question for a lot of Americans is whether you’d like to go back to a permanent nomadic style of life. I’m afraid we’d just slip further behind the median lifestyle, and our skills to get along would atrophy.”

Survival skills, at least, are sharpening at Timberline.

Kathy Newton, a veteran, couldn’t raise $500 for a deposit on an apartment so instead moved to an expanding compound at Site 34 at Timberline. At least, she claims, her health has improved by living outside.

But campground life, she says, is not for everyone: She offered her homeless son a spot on an inflatable mattress with 400-threadcount sheets, but he left one morning without saying goodbye to couch-surf at the homes of friends.

“You quickly realize what you don’t need in life,” says Ms. Newton. “This is more home to me than living in the squalor of a motel efficiency [unit] looking at a parking lot all day.”

The sense of community extends even to management at Timberline. Campground manager Tammy Page says she is letting those who can’t afford the monthly rent stay on. Six months ago, she created a food bank that’s now well stocked after a newspaper article brought attention to the Timberline campers’ plight. Near the front desk is a table full of free school supplies, including scissors and pencils. There’s a laundry facility, clean showers, a pool, and a few weeks ago an Elvis impersonator stopped by the “clubhouse” to entertain the kids.

“Yes, it’s hard times, but they’re having fun while it’s going on,” says Ms. Page.

The stimulus bill that Congress approved in February allotted $1.5 billion in Housing and Urban Development grants to help people on the financial edge stay in their apartments or to pay for deposits and last month’s rent for people looking to get into a permanent house. New York, Chicago, and Los Angeles alone could chew through those funds, leaving scraps for the rest of the country, says Heumann.

Laurie Bowen could use $300 of that $1.5 billion right now for a down payment on an apartment. “It’s just not right,” she says, for her daughter to be raising two boys, Glenn and Damiyan, in a rickety trailer with a broken sliding door, and all of them sleeping in the same bed.

Yes, it’s an improvement from when the extended family arrived here last year after being evicted from a rental house, to stay in a five-man tent for four months. A campground caretaker said if they’d pay him $100 for 10 months they could have the “silver bullet” camper he was using for storage, a home they’ve now decorated with lush flowers, tomatoes, and even an apple tree planted in an old pickle barrel.

Their attempt now to slingshot at least their daughter – who works nights at the Dollar General – and her two small boys into an apartment shows how narrow the margins are between a life in the burbs and a permanent camp in the woods.

When summer ends, the plant nursery industry will contract, putting Ms. Bowen’s husband’s new job in jeopardy. Her campground season isn’t described by the earth’s position around the sun, but by the slow turn of a poor national economy.

“Layoff season is coming again,” she says.

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