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$7,500 cash transfers have major impact in reducing homelessness

As spikes in homelessness take place across America, a potential solution has emerged from north of the border.
$7,500 cash transfers have major impact in reducing homelessness
Posted at 1:12 PM, Nov 14, 2023

Vancouver has long been one of the world's great scenic cities — a confection of coast, crystal-blue water and Canadian air.

But for Ray Bonnetrouge, the most satisfying sights in his city are his screens, his couch, and above all his roof.

"It's the warmth, the comfort," Bonnetrouge said, "And not having to worry about how I'm going to be warm for the day."

Bonnetrouge was homeless for a year and a half. But his story of finding a home didn't happen in isolation. It intertwines with an experiment that could change, on a grand scale, how we treat those who are unhoused.

"Who does that?" Bonnetrouge said. "Who gives you money? A complete stranger giving you money, right?"

Bonnetrouge was part of "the first randomized control trial to test the impact of a cash transfer on people who experienced homelessness," said Jiaying Zhao, a researcher at the University of British Columbia.

Zhao was part of a team that spent one year shadowing 115 people, all experiencing homelessness. Fifty people received an unconditional cash transfer of $7,500. Compared to the group that got nothing, the cash recipients spent 99 fewer days homeless and 55 more days in stable housing. They spent more money on durable goods, food, and transit. And they didn't spend more on what some might expect.

"There's actually a reduction in substance use severity over one year," Zhao said. "The typical assumption is you have substance use and addictions, and therefore you're homeless. Our evidence suggests it's the other way around."

Bonnetrouge struggled with addiction for years. But even after he beat his addiction, he could never scrape up enough money for rent until Zhao's team came calling.

SEE MORE: Investigation into man performing medical services for homeless people

"I looked at the bank account a few times over the phone, right, saying, 'OK, there's $7,500 there. Now what am going to do with it?'" Bonnetrouge said. "My whole goal was to get education and to find a decent place to live. And then when they got involved with me, they gave me the funds to get there."

Bonnetrouge had previously taken temp jobs to have any income at all. With money in the bank, he refocused on education, found stable employment, and eventually found a place to stay.

"That's the difference between a one-time lump sum versus a monthly paycheck or monthly payments," Zhao said. "It also is a sign of belief, that we believe in them."

The study has caught eyes beyond the Canadian border.

Spikes in homelessness have made headlines in cities and states across America. Some have responded by expanding services, others by criminalizing public camping. Now comes a new option.

"I think we've found a number of Band-Aids, and I think we've found a number of ways of supporting people while they're homeless," said Amber Dyce, whose Foundations for Social Change partnered with Zhao's team on the study. "I don't think we've ever come up with a solution of how to help people not be homeless anymore."

Leaders and academics in several cities have reached out to Dyce and are pursuing similar projects. At least in one case, the results are matching up. The University of Denver gave varying amounts of money to hundreds. After six months, the number using shelters or sleeping outside plummeted. The number renting or owning a house or apartment soared.

The question now is: Will it matter? Guaranteed income in some form has been picking up steam for a decade, but public opinion remains varied and often split. Guaranteed income as a remedy for homelessness is an entirely new concept.

It brings us back to that city of coasts and crystal blues. Bonnetrouge now works for Foundations for Social Change. He spends time on Vancouver's streets, recruiting those where he once was to take part in the project he once joined.

"I give thanks to the big guy every day," Bonnetrouge said. "And that's where I really look at what I do, and I want to be able to give that to somebody else — who needs that little seed to grow into something beautiful."

SEE MORE: Virginia food pantry cited after homeless people leave a mess

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