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Canadian researchers looking into the scourge of homelessness in that country gave ‘unhoused people’ $7 500 (R135 000) each in an attempt to study the ‘benefits of cash transfers to low-income populations’.

The move is in line with growing global evidence demonstrating that this kind of ‘cash-in-hand’ approach might be a better solution to current ones.

When looking at ways to alleviate homelessness, more researchers are suggesting that policymakers give people money, even lots of money, upfront. A growing body of evidence seems to back this up.

The study was published on August 29 in the journal Proceedings of the National Academy of Sciences (PNAS), and the results were surprising to many researchers.

What they found was that lump sum payments of $7,500 (R135 000) reduced the number of days that recipients were unstably housed by 99 days, did not lead to an increase in spending on drugs or alcohol, and even created net savings of $777 (R14 000) per person per year from reduced number of days in a homeless shelter.

Conducted between 2018 and 2020, the study tracked 115 homeless people in Vancouver between the ages of 19-65 over a year. Fifty people received the cash payments, with sixty-five people received no cash payments at all.

Of the participants who received cash, the average person had saved approximately $1 000 (R19 000) in cash by the end of the year.

“The study adds to growing global evidence demonstrating the benefits of cash transfers to low-income populations.”

There are some caveats: while cash recipients did not increase their spending on what researchers called “temptation” goods, like alcohol, cigarettes, and drugs, the study filtered out participants who had severe levels of substance use and severe mental health issues. In other words, they did choose the ‘best case scenario’ for the study.

Researchers do however claim this was to prevent the risk of overdose deaths or other “harm”. They also filtered out people who had been homeless for more than two years.

Study co-author Jiaying Zhao said that this was because nonprofit partners in the study believed this would filter out people with more serious issues.

“We were told by community partners on the ground that it’s their impression: the shorter time you were homeless, the more likely you’re going to be higher functioning.”

According to the research, the implication of the study is that, “People who pass the screening criteria in our study, the policy implication is that government should increase the income assistance for these folks so they can get back into housing and get their life back.”

Of the time that recipients were stably housed, 75% was spent in an apartment rental, and 17% was in a single-room occupancy unit. Since Canada’s homeless shelters cost about $93 (R1 700) per night per bed to operate, the study led to $8,277 (R160 000) less spent on shelters per participant, which means the cash handouts created net savings for the government.

There have been some experiments with providing basic incomes to unhoused people across Canada and the United States, though these are generally small payments. A nonprofit called Miracle Money gave nine unhoused people in San Francisco $500 (R9 600) a month for 6 months, and by the end of the period, six of them were able to obtain permanent housing.

Whether an approach like this would work with our homegrown problems with homelessness is a good question. With ‘tent cities’ springing up all over our cities, it’s perhaps not a bad idea to start thinking outside of the box.

[source:vice]