While there’s a perception among policymakers that homelessness is too expensive a problem to solve, a new peer-reviewed study finds the opposite may actually be true.
Researchers at the University of British Columbia and Foundations for Social Change provided a once-off, unconditional CAD$7,500 (roughly US$5,500) cash transfer to 50 homeless individuals, and told them they were free to spend it as they pleased.
The researchers monitored the outcomes at various intervals over a one-year period, and compared them to a control group of 65 homeless people.
Here are the results, which were published in the journal PNAS:
- Over the one-year period, the cash recipients spent spent 99 fewer days being homeless, as they generally moved into rental apartments. This saved the shelter system CAD$8,277 per person, which exceeded the cost of the programme.
- In spite of expectations to the contrary, the recipients did not increase spending on temptation goods, such as alcohol, drugs and cigarettes. Spending in this category was no different from the control group.
- The participants rather spent their money on rent, durable goods such as furniture, food, and transport.
- The recipients also put money away for the future, and ended up saving CAD$1,160 on average.
“The exploratory analyses showed that over one year, the cash transfer reduced days homeless, increased stable housing, savings, and spending, but without increased spending on temptation goods, and generated net savings for society via reduced social service use,” the report reads.
Yes, but: The authors acknowledge that the results may not extend to people who are chronically homeless or experience a higher severity of substance use, alcohol use, or psychiatric symptoms.
“Regardless of these limitations, this study provides proof of concept for the provision of cash as a new tool to reduce homelessness.”
“I find it difficult to exaggerate the implications of this finding,” historian Rutger Bregman said on X, the social media site formerly known as Twitter. “It could revolutionise how we deal with endemic problems like poverty and homelessness.”