Google.org, the philanthropic arm of Google, recently announced a $10 million donation to fund research on the impact of cash transfers on homelessness in the Bay Area. The study aims to better understand if and how directly giving individuals cash can improve their housing situation and whether it will ultimately reduce homelessness in the region.
Who Benefits and How?
The study will focus on two groups: individuals experiencing homelessness or at risk of homelessness and landlords renting to tenants with low incomes.
People Experiencing Homelessness—Homelessness is a complex issue caused by various factors, including unemployment, mental illness, addiction, and domestic violence. In addition, the inability to find stable housing and maintain consistent rent payments can lead to a cycle of eviction, homelessness, and further financial instability. By providing cash transfers to those in need, Google hopes to break that cycle and give individuals the stability they need to get back on their feet. With consistent rent payments, individuals can focus on finding employment, accessing healthcare, and addressing any underlying issues that may have contributed to their homelessness.
Landlords—Additionally, the study will examine how landlords benefit from cash transfers. In many cases, landlords may be more likely to rent to tenants with lower incomes if they know that reliable rent payments will be provided through cash transfers. This could ultimately lead to more affordable housing options for those in need. Landlords also benefit from having long-term, reliable tenants. Evictions can be costly and time-consuming, leaving landlords with vacant properties that are difficult to fill. Through cash transfers from tenants, landlords will obtain consistent rental income and avoid the hassle of eviction proceedings.
Google.org Will be Working in Partnership With Local Nonprofits
Google.org has been at the forefront of research on cash transfers to address poverty and inequality. It has distributed over $30 million to almost a quarter million households globally. This latest study is part of a 2019 commitment of $50 million to address homelessness in the Bay Area.
Google.org will support the Abdul Latif Jameel Poverty Action Lab (J-PAL) to work with various Bay Area homeless service providers. The Bay Area Evaluation Incubator will assist these providers in bolstering their capacity to participate in randomized evaluations of cash transfer programs.
Additional cash transfer pilots will be carried out by:
- Bay Area Community Services and the University of California San Francisco;
- Chapin Hall, in partnership with Point Source Youth and Larkin Street Youth Services; and
- Miracle Messages, in partnership with the University of Southern California.
Can Cash Transfers Improve Housing Situations?
Cash transfers have shown promise in addressing and preventing homelessness. Research shows that where recipients can decide how to spend their money, their financial, physical, and psychological well-being is improved.
While government initiatives targeting homelessness have not utilized cash transfers, several experimental programs by nonprofit organizations have demonstrated positive outcomes.
- The Opportunity NYC-Family Rewards program provided conditional cash transfers to low-income families. The results were reduced hunger, increased savings, and higher full-time employment rates.
- The New Leaf Project in Vancouver, Canada, gave one-time unrestricted cash transfers to newly homeless adults. It led to faster housing stability, reduced reliance on temporary shelters, and improved spending habits.
- The Broadway Study in London, England, provided one-time payments to men experiencing chronic homelessness. It resulted in a significant number of participants transitioning into permanent housing.
Furthermore, ongoing studies are exploring the effectiveness of cash transfers in addressing homelessness. For example, Foundations for Social Change aims to expand the New Leaf Project by raising funds to increase subsidies, expand the sample size, and collect more comprehensive data. In the United Kingdom, Broadway conducted a trial program similar to the New Leaf Project, resulting in a substantial portion of participants moving into permanent housing. Other initiatives, such as the Chapin Hall and Point Source Youth program, are piloting long-term cash transfer approaches to empower young people experiencing homelessness. However, the results of these ongoing studies and initiatives are not yet available.
Looking Forward
It may be that cash transfers alone will not solve the issue of housing insecurity. Additional support in the form of affordable housing, job training and placement, and mental health and substance abuse services may be necessary. Additionally, the impact of cash transfers on housing situations may vary depending on the specific context in which they are implemented. For example, cash transfers may not be sufficient to afford stable housing in areas with high housing costs.
Despite these challenges, using cash transfers to address housing insecurity is a promising area of research. Google.org’s generous donation and commitment to funding this area of research will undoubtedly contribute to a more nuanced and evidence-based understanding of homelessness and poverty in the Bay Area and beyond. The hope is that this research will also serve as a model for other cities and regions struggling with homelessness and housing insecurity.