This study examines the gay liberation movement in Los Angeles County through the lens of housing rights. It illustrates how sexual justice activism evolved in tandem with the fates of the welfare state and urban politics. Like racial minorities, queers have been stymied by economic barriers. Beginning in the 1930s, federal housing agencies established “family” requirements to housing subsidies, which the state defined through biology or marriage. In L.A. County, activists worked to overcome this heteronormative barrier at the grassroots and within the political establishment. Binding gay liberation to economic and family justice, queers opened housing shelters and social service programs. This activism relied on public financing from the state. Moreover, like the Moral Majority, activists cast gay liberation in pro-family terms in order to win political support. This strategy encouraged the definition of family to change. By the end of the 1970s, housing policies at local and national levels recognized the pluralism of family life, revealing the covert success of gay liberation in public policy. While this was a remarkable achievement, gay liberation fell victim to urban austerity politics. Beginning with the 1978 California Tax Revolt, this movement encouraged privatization and public disinvestment in cities. Austerity degraded the welfare state and eliminated vital urban programs, worsening the urban crisis. In response to the crisis, the political geography of gay liberation in L.A. shifted to narrower contexts. Activists attempted to solve urban problems by incorporating a new city and relying on the private sector to solve public problems. By 1986, development and business interests had replaced the state as the chief benefactor of queer activism. While often examined in isolation, this project binds the histories of sexuality, the welfare state, and urban politics together to show their interconnectedness