Look up the tunnels, and the world's end .

Regarding the first, homelessness was illegal, and you could be in a lot of trouble (including execution) for being out after curfew. People lived in catacombs and tunnels to avoid detection, and if they were half as bad as described, it was a hellish life.

The second, if I recall correctly, there was a tax to enter the city. Even for "citizens" going out for the day or whatever

So if you were desperately poor, you couldn't even hunt for work outside the city without commiting to stay away until you could pay to reenter. So there became a trap where people were too poor to leave, too poor to get a legal residence, and had to find somewhere the guards wouldn't hassle them.

I'm sure some of this is a bit different, but if it's even close, it's a brutal trap to be stuck in