Of all that’s been tried with homelessness, from police sweeps to harm reduction, from mats-on-the-floor shelter to tent cities to housing first, there’s one strategy that’s never been in the mix.
Just give them money.
“No, no, you can’t do that, it’s crazy, it’ll never work,” says Jiaying Zhao, a psychology professor at the University of British Columbia, describing the reaction she invariably gets to her latest research. “You give homeless people money, they’ll waste it.”
It turns out it might be a more efficient and humane way to help than the elaborate homeless aid network we have now — at least for some of the estimated 12,000 folks currently struggling in the Seattle region’s shelters and on the streets.
Zhao, who studies the intersection of psychology and economics, has released the findings of what is being called the world’s first “direct cash transfer program” for the homeless, conducted this past year in Vancouver, B.C.
Carried out with a charity called Foundations for Social Change, the project was simple: Hand CA$7,500 (about $5,700 in U.S.) to 50 homeless people, identified at Vancouver homeless shelters, and let them spend it however they want. The results were compared to a control group from the same homeless shelters who didn’t get the money.
Bottom line: Over a year, the 50 who got the money spent 4,396 fewer nights being homeless than the control group. Which the researchers say is enough relief on the shelter system to more than cover the cost of the cash handouts.
A year on, “there are only two or three of the 50 who can be categorized as still homeless,” Zhao said. “That’s what is the most surprising to me — not that this worked, but how fast it worked.”
She said the study found the homeless not only didn’t waste the money, they hadn’t even spent all of it 12 months later. The group of 50 has, on average, $1,000 left in savings (bank accounts were set up for each person). Mostly they used it to rent low-income subsidized apartments for which they previously hadn’t been able to muster the deposits or monthly payments, and for food.
“It really challenges ideas we have about impulsive spending and the homeless,” she said.
The caveats of the study are that it screened everyone, both cash recipients and the control group, to make sure nobody had severe mental illness or debilitating substance abuse issues. The reason for this, Zhao says, is the researchers didn’t want to possibly cause harm by introducing large sums of money into situations where people couldn’t handle it without intensive case manager assistance.
“I would describe this group as among the higher functioning adults at the shelters,” she said.
An effort in London, though, called the “Rough Sleepers Project,” specifically targeted the toughest cases. It gave “personalized budgets” to 13 of the chronically homeless who had been sleeping in doorways for years, with that money managed by a case worker. While two of the 13 did not take to the payments — one even ended up in prison — 11 eventually moved off the streets into more stable situations.
Zhao said the work is too preliminary to say if cash transfers might work with all the types of life stories and traumas that make up the homelessness universe. It’s also hard to know whether cash payments could work in lieu of the existing homeless aid network, or whether it’s essential that one be layered on top of the other.
“I don’t think this approach would work for everyone, so it would need to be used as a targeted tool,” she said. “But it’s one that is proving more effective than business as usual.”
The Vancouver study will be broadened next year to give money to 200 homeless people.
So here’s the big question: Could this work in Seattle?
Zhao says the political resistance to giving homeless people money is overwhelming, even in Canada, which is more open to welfare for the poor than the United States. Among the most hostile to her project, she said, have been some in the homeless aid industry itself.
The old “Freeattle” issue is sure to be a stumbling block here, as it’s probably true that handing out money would draw more homeless people to the city from elsewhere. Any project here would doubtless have to be tightly controlled.
That said, what’s intriguing about cash payments is they marry the left’s interest in government aid with the right’s passion for individualism. Zhao said the real power of the project is that people weren’t told what to do with the money, and so “felt like they had agency and control, some of them for the first time in their lives.”
This is exactly how former Democratic candidate for president Andrew Yang described his proposal for a “universal basic income.” It’s like what happens when companies pay dividends because they believe shareholders know how to most efficiently spend the money.
“If you return money to a family, they’ll know best how to solve their own problems,” Yang argued earlier this year.
In a year when many of us have been given $1,200 stimulus checks to help us get by during the pandemic, is it really a stretch to imagine the same thing couldn’t work, in a targeted fashion, for the most down and out?
I honestly don’t know. But when it comes to the homelessness problem in Seattle, it sure seems like we’ve tried everything else.