Giving Money to Homeless People

Vox covers a new Canadian study of how to help homeless people:

The study, conducted by the charity Foundations for Social Change in partnership with the University of British Columbia, was fairly simple. It identified 50 people in the Vancouver area who had become homeless in the past two years. In spring 2018, it gave them each one lump sum of $7,500 (in Canadian dollars). And it told them to do whatever they wanted with the cash.

“At first, I thought it was a little far-fetched — too good to be true,” Ray said. “I went with one of the program representatives to a bank and we opened up a bank account for me. Even after the money was there, it took me a week for it to sink in.”

Over the next year, the study followed up with the recipients periodically, asking how they were spending the money and what was happening in their lives. Because they were participating in a randomized controlled trial, their outcomes were compared to those of a control group: 65 homeless people who didn’t receive any cash. Both cash recipients and people in the control group got access to workshops and coaching focused on developing life skills and plans.

The results? The people who received cash transfers moved into stable housing faster and saved enough money to maintain financial security over the year of follow-up. They decreased spending on drugs, tobacco, and alcohol by 39 percent on average, and increased spending on food, clothes, and rent, according to self-reports.

Plenty of other studies have shown that some homeless people can see their lives turned around by a one-time generous intervention, like cash or a free apartment. You can imagine how this happens: becoming homeless can be part of a downward spiral, losses or failures, leading to depression or binge-drinking that leads to further losses and failures. A big intervention can get some people out of that spiral and help them get back on track. This study also found what some others have, that these interventions more than pay for themselves in things like reduced hospital visits.

Unfortunately the story is more complicated than that. For one thing this study strictly limited the pool of eligible people:

The study only enrolled participants who’d been homeless for under two years, with the idea that early intervention most effectively reduces the risk of people incurring trauma as a result of living without a home. And people with severe mental health or substance use issues were screened out of the initiative.

Those are precisely the people most likely to stay homeless over the long haul; people without addictions or other severe mental health problems are the ones mostly likely to get themselves out of trouble without help. So, yeah, it's always easiest to help the most promising cases.

Again, these interventions seem to pay for themselves, and they certainly help some people get back on their feet a lot faster, so I'm all for them. But there is no long-term solution to our homelessness problem without much better mental health care and addiction treatment.