Denver gave people experiencing homelessness $1,000 a month. A year later, nearly half of participants said they had housing.
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- The Denver Basic Income Project gave cash to more than 800 Coloradans experiencing homelessness.
- They were divided into three groups to see how different payment structures might benefit them.
- Similar findings were reported across groups, including those who got just $50 a month.
Editor's note, July 11, 2024: This story was updated with context about the findings from the Denver basic-income pilot's control group. The story, which originally focused on the pilot's overall findings, now notes that the pilot's organizers did not identify major differences in outcomes between the test groups and the control group. This suggests that giving more money to participants didn't significantly improve their outcomes after 10 months. The story was also updated to clarify findings involving participants' mental health. While some individual participants did report improvements to their mental health, participants on average scored higher on the Kessler 10 test at the pilot's 10-month mark than they did at the beginning, indicating increases in stress.
Jarun Laws lived in his car in a restaurant parking lot near downtown Denver. He worked there as a cook until 2020 and had only $400 a month left after paying bills and child support. That was barely enough to cover his car payments and child support — and not even close to what he would need for rent.
The 51-year-old occasionally spent part of his paycheck on weekend stays at a cheap hotel, where he could spend time with his children. He struggled to afford food, clothes, and medicine — and he had been experiencing homelessness for nearly a decade.
That changed when Laws enrolled in the Denver Basic Income Project. He said the pilot program, which gave him $6,500 up front and $500 each month after, allowed him to secure a temporary apartment with furniture, spend more time with his children, and find a better-paying job.
"I had questioned myself: if I was going to be a good father to my children because I was suffering," Laws previously told Business Insider. "When I got accepted, it changed my life."
Denver's basic-income pilot program — which started payments in fall 2022 — focused on more than 800 Coloradans experiencing homelessness, including people living in cars, temporary shelters, the outdoors, or other nonfixed living situations. Participants like Laws were given direct cash payments, no strings attached, and could spend the money on whatever they chose.
The city's program initially lasted one year and was extended in January for six months. Participants were randomly sorted into three groups: One received $1,000 a month for a year, another got $6,500 up front followed by $500 a month, and a third got $50 a month as a control group.
Overall, the program found similar outcomes among the participants — indicating the two trial groups didn't outperform the control group.
During the program, participants were asked about their housing, food security, finances, and mental health. On June 18, the program released its one-year report, based on the self-reported surveys. It said that 10 months into the program, roughly 45% of participants in each group said they were living in their own house or apartment, up from 6% in both trial groups and 12% in the control group who said the same at the program's start.
The report suggested participants spent less time in places like emergency rooms, hospitals, temporary shelters, and jails during the program than they did before. It estimated that this reduction in public-service use saved the city $589,214.
These savings are a fraction of the $9.4 million it took to fund the program — with money coming from the city, the philanthropic organization The Colorado Trust, and an anonymous foundation.
Basic-income pilots like Denver's have become a trending approach to poverty reduction in US cities. Denver's program results reflect the short-term impact of cash payments on participants. Though researchers described housing gains, it's not clear how the basic income will affect participants in the long term.
Laws, for example, had to return to living in his car after the payments ended.
Results of Denver's basic-income project
Participants in Denver's program told researchers that the basic income primarily helped them pay for immediate expenses like transportation, hygiene, clothes, and groceries as well as recurring bills like rent, health insurance, or debt payments.
Participants in each payment group said they felt more financially stable and relied less on emergency financial-assistance programs than they did before the basic-income program began.
Nick Pacheco, a participant engagement coordinator, said at a press conference on June 18 that basic income helped put low-income families on "an equal playing field." He added that cash payments helped participants get training and resources to establish careers.
The program said participants who received the lump sum or the monthly payments of $1,000 were more likely to report having a full-time job than they were before they received basic income. Meanwhile, the percentage of participants in the control group who said they had full-time employment decreased slightly.
The report said participants in all three groups scored higher on average on a test called Kessler 10, designed to evaluate a person's overall level of psychological distress, at the 10-month mark than they did when the program began. (A higher score indicates more stress.)
But it also said participants in the $1,000-a-month group and the control group reported spending more time on leisure activities, such as being with family and friends, than they did when the program started. It added that parents in the program said they were able to better support their children and grandchildren financially.
These results echo those from the six-month report, which found that, compared with the start of the program, fewer people across all participant groups said they were sleeping on the street, experiencing food insecurity, and feeling unsafe.
Even so, several of the results — including in housing — were similar for both the participants in the two groups receiving higher payments and the participants in the control group, suggesting that giving more money to participants didn't significantly improve their outcomes.
Many families told the researchers that they were anxious about paying bills after the end of the payments. Some said they worried they could lose their housing.
"It is difficult to discern from the DBIP 12-month findings if changes in outcomes were a result of the differential amounts of unconditional cash or were due to other characteristics of the intervention," the researchers wrote in the report. They added that the availability of temporary housing vouchers during the COVID-19 pandemic could have also affected housing outcomes.
Some participants were better able to pay bills in the short term with basic income
Some participants in Denver's program have told BI that basic income was the financial safety net they needed.
Moriah Rodriguez, 38, was working as a youth developer for Denver Public Schools when she got hit by a car and suffered a traumatic brain injury. She lived in public housing with her kids, all of whom have intellectual disabilities, though they were displaced shortly after.
She received monthly Social Security payments, just enough to care for her kids. While staying with a friend, she learned about the pilot program.
Rodriguez used the payments to fix her truck, transport her kids to school and work, buy new clothing, and secure a lifelong public-housing voucher. She also used some of the money to pay for monthly expenses — mostly rent and gas — and some smaller daily purchases. She said that she returned to school to get her GED and that her credit score increased.
Rodriguez said the basic income gave her more time to focus on her children's education and mental health, adding that the program's extension was another lifeline. "I had the space to get them tested and get them diagnosed and connected with the support they need," she said.
Dia Broncucia, 53, and Justin Searls, 45, who received the $6,500 lump sum and $500 monthly payments, said the basic income helped them afford things like an apartment, a new car, clothing, hygiene products, furniture, and mental-health resources. They said they previously lived in a temporary shelter but were able to secure a studio apartment for $1,300 a month.
Broncucia and Searls said last October that though they had some uncertainties about their future, they felt much stronger and less stressed because of basic income.
"Starting with nothing and then being able to receive a lump sum of money and then get our payments once a month is why we were able to get on track and stay on track," Broncucia previously told BI.
Cities are using basic-income pilots to try to address poverty
While Denver's one-year results were mixed, basic-income pilots are increasingly popular in the US. In recent years, lawmakers in California and New Mexico have proposed starting or supporting basic-income programs for various groups of residents.
"The lessons from those pilots are infusing the whole ecosystem of support," Teri Olle, the director of Economic Security California, a branch of the nonprofit Economic Security Project, previously told BI. "People are really seeing the power of those pilots and the power of giving people money and trusting them."
The leaders of Denver's program hope to extend it for a third year and are raising millions of dollars to do so. While the researchers haven't found evidence that giving people $1,000 a month is substantially more effective than giving them $50, they said they hoped to see more-significant differences between participants in the trial groups and those in the control group over time.
Mark Donovan, the project's founder and executive director, said in June that he was paying close attention to results from basic-income programs across the country, adding that it's a "really exciting time in the movement."
"If we're able to move people into housing and out of homelessness at a lower cost and generate better long-term outcomes, why wouldn't we try to expand and build upon that?" Donovan said.
Have you benefited from a basic-income program? Are you willing to share how you spent the money? Reach out to these reporters at allisonkelly@businessinsider.com and nsheidlower@businessinsider.com.
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