Several hundred Denverites experiencing homelessness have received regular sums of cash, no strings attached, as part of an experiment by the Denver Basic Income Project. Six months into its yearlong experiment, an interim report has shown some encouraging results. Recipients are spending the money on vital needs and sleeping on the street less, and they appear to be securing full-time work at higher rates when given more money.
UBI experiments are meant to challenge and test the premise that people — especially poor people — can’t be trusted to spend money responsibly.
The cash assistance program, which is being conducted in coordination with the University of Denver’s Center for Housing and Homelessness Research, involves 820 adults who lack “fixed, regular, and adequate nighttime residence” because of loss of housing or economic hardship or similar problems. The participants are divided randomly into three groups: Group A, in which participants receive $1,000 a month for 12 months (a total of $12,000 for the year); Group B, in which participants receive $6,500 upon enrollment and then $500 a month for the following 11 months (also a total of $12,000 a year); and Group C, which receives $50 a month, for a total of $600 for the year. This third group is meant to provide a point of comparison for the two other groups.
The idea behind experiments associated with the idea of “universal basic income” (UBI) is to measure the effects of giving people cash directly and without restrictions on how it can be spent. Unlike, say, federal SNAP benefits (which most of the study’s participants were receiving), the money doesn’t have to be spent on food. In many ways, UBI experiments are meant to challenge and test the premise that people — especially poor people — can’t be trusted to spend money responsibly and for their own good without supervision.
Six months in, a majority of the program’s participants report that they are seeing marked improvements in their lives on many fronts. All three groups saw significant upticks in participants who were staying at homes they either rented or owned: Group A reported a 26% increase, Group B reported a 35% increase, and Group C reported a 20% increase. There was also a decline in participants sleeping outside, which isn’t where most people sleep when they are homeless, although it represents one of the most publicly visible — and dangerous — ways homelessness is experienced. Upon enrollment, 10% of Group A’s participants were sleeping outside, but by the six-month mark no one was. Group B went from 10% to 3%, and Group C went from 8% to 4%. The percentages of participants who spent nights in shelters roughly halved across all three groups, as well. Participants in Groups A and B reported feeling safer and more welcome in their sleep environments.
One of the report’s most notable findings is that cash assistance is associated with a higher likelihood of securing a job. At enrollment, 18% of participants in Group A had full-time work, and at the six-month mark 25% did. In Group B, the number went from 21% to 35%. Group C saw no change.
With another six months to go, there’s reason to be tentatively optimistic that Denver’s cash assistance program is having a meaningfully positive effect. The preliminary findings suggest that the larger amounts of cash assistance are allowing some of the city’s most vulnerable residents to live safer lives and to find proper places to rest their heads at night and that they help them find jobs. This data tracks with widely observed trends in other basic income experiments that show that recipients of “no strings attached” cash tend to use the money effectively to address urgent necessities. While American conservatives prefer to attach conditions and strict supervision to financial assistance, experiments with unconditional cash transfers, like the one in Denver, can counter the knee-jerk assumption that people with limited resources can’t be trusted to help themselves.
Reading the report raised many questions for me about basic income as a way to address homelessness specifically. I’m still curious to know whether cash assistance to people experiencing homelessness is the most efficient or effective way to help people during a housing and financial crisis, as compared to, for example, immediately placing people in permanent housing. The National Alliance to End Homelessness describes the “housing first” model as a belief in “housing as the foundation for life improvement” that’s guided by the belief that “people need basic necessities like food and a place to live before attending to anything less critical, such as getting a job, budgeting properly, or attending to substance use issues.”
Experiments with unconditional cash transfers can counter the knee-jerk assumption that people with limited resources can’t be trusted to help themselves.
A lot of data shows that supportive housing is an effective way to reduce homelessness among certain populations and to help people get back on their feet, mentally and financially.
Another question is how much the Denver model could inform policy decisions to address homelessness when eligibility for the program required “not having severe and unaddressed mental health or substance use needs.” A significant proportion of the chronically homeless population experiences such challenges. It seems possible that cash assistance and supportive housing could serve as different, complementary solutions to different parts of the homeless population, but it would be useful to see comparative data.
In any case, the data from Denver’s program is interesting and important. Particularly at a time when housing prices are spiraling out of control, it’s imperative to remain open-minded and take risks as governments and nonprofit groups work through how to alleviate the tremendous crisis of people losing safe places to stay.
