Introduction to Homelessness and Cash Support
Does giving someone who is homeless $750 a month help them get back on their feet enough to secure stable housing? Researchers at USC attempted to answer that question and came up with a less than firm conclusion: Maybe. According to the yearlong study published this month, of the unhoused people who received the cash stipend, 48% exited homelessness, compared with 43% in a control group of homeless individuals who did not receive money.
The Study’s Findings
Although those who received $750 a month were 20% more likely to become permanently housed, the difference wasn’t large enough to be statistically significant and to say definitively that the cash was the reason for improved outcomes, said Benjamin Henwood, director of USC’s Center for Homelessness, Housing and Health Equity Research. At the same time, the study found participants used the money to bring more stability to their lives and overwhelmingly spent the cash on essentials such as food, transportation and clothing — not drugs and alcohol.
How the Money Was Spent
“These findings highlight the strengths and limitations of cash transfers,” the authors wrote in a report. Henwood put it like this: “It wasn’t like, ‘Here is the money — boom, everything is better.’ But we did see that it shifted people’s trajectories.” The study was a partnership between USC’s Center for Homelessness, Housing and Health Equity Research and Miracle Messages, a nonprofit that distributed the money. In late 2020, Miracle Messages launched a pilot program in the San Francisco Bay Area and found that six out of nine homeless people it gave $500 a month to were able to secure stable housing.
Cash Distribution and Spending
To test those findings at a larger scale, the nonprofit teamed up with USC researchers and distributed, via debit cards, $750 a month for a year to 103 homeless individuals in San Francisco, Oakland and L.A. County. Participants were able to spend the money as they chose. About 5% of the money was spent on so-called temptation goods — 3.4% on cigarettes, 1% on alcohol and 0.7% on drugs, according to researchers who surveyed participants and analyzed debit card purchases and withdrawals. There was also no reported increase in the level of drug and alcohol use among those receiving the money. Most of the cash went toward food, followed by housing, “other” spending, transportation and clothing. Researchers said items in the “other” category included things such as paying for storage, reducing debt and helping family.
Impact on Homelessness
Though $750 a month, in nearly all cases, isn’t enough to rent an unsubsidized apartment in Southern California, Henwood said that for some participants it made life easier and gave them time to find a subsidized place. In one instance, Henwood said that a homeless woman secured a federal housing voucher that pays most of the rent to private landlords. She thinks the landlord was more willing to rent to her because they could see at least some money in her bank account. The findings differ somewhat from preliminary results released after six months of study. Then, Henwood and other researchers similarly found the vast majority of funds went toward essentials, but they also found people who received money were far more likely to move from living on the streets to some form of shelter, which would include interim housing sites.
Future of Cash Support Programs
After a full year, not only was the change from homelessness to permanent housing not statistically significant, but so was the shift from unsheltered to sheltered. Henwood said more studies with larger sample sizes could help answer just how impactful cash payments are in reducing homelessness. Given the results, authors recommended future cash-support programs be paired with targeted help to find housing. And they said policymakers might also want to look at programs that provide more money — and do so for longer, given that the study found very little of the cash was spent on drugs and alcohol.
Conclusion
The study provides insight into the potential benefits and limitations of cash support programs for individuals experiencing homelessness. While the results are not conclusive, they suggest that such programs can have a positive impact when paired with targeted support for finding housing. Further research is needed to fully understand the effects of cash payments on homelessness and to determine the most effective strategies for implementing these programs.
FAQs
- Q: How much money was given to homeless individuals in the study?
A: $750 a month for a year. - Q: What percentage of participants exited homelessness after receiving the cash stipend?
A: 48%, compared to 43% in the control group. - Q: How did participants primarily use the money?
A: On essentials such as food, transportation, and clothing. - Q: Was there an increase in drug and alcohol use among those receiving the money?
A: No, there was no reported increase. - Q: What is recommended for future cash-support programs based on the study’s findings?
A: Pairing cash support with targeted help to find housing and considering programs that provide more money for longer periods.
