Denver is set to provide 140 homeless people with $12,000 in no-strings-attached cash in an attempt to help lift them out of destitution – and combat the squalid encampments and soaring crime rates plaguing the Mile-High City.
The city has allocated $2million from the American Rescue Plan Act to fund the program, which will be run by the Denver Basic Income Project.
The total program, which will cost up to $9million, is seeking to help around 820 people, but the $2million provided by the city will fund around 140 people.
The rest of the money will be raised through charitable foundations, including the Colorado Health Foundation and the Denver Foundation, Denver Basic Income Project founder Mark Donovan told Axios Denver.
Around 4,700 households are experiencing homelessness in Denver as of January 2022.
The participants – which will mainly be women, transgender and gender non-confirming individuals – will be chosen at random after applying and will more than likely begin receiving payments starting in November, according to ABC 7 Denver.
Denver Basic Income Project founder Mark Donovan (pictured) and his team will provide 820 homeless people with money. 520 of them will receive $12,000 each over the course of a year as part of a study to see if a basic income system would help with housing and mental health
‘The pandemic has had a really big impact on the state of homelessness in our community that we’ve seen increased numbers of families seeking shelter, as well as, an increase number of women using our shelter system,’ Angie Nelson, deputy director of Housing Stability and Homelessness Resolution, told ABC 7.
The program is divided into three different groups, with 260 receiving $6,500 up front and then getting $500 a month for 12 months; another 260 will receive $1,000 a month for 12 months; and the control group of 300 will get a $50-a-month stipend to complete surveys.
All participants will also get a free cell phone and a year of service.
In addition, the Colorado Coalition for the Homeless will track how people use the money, as well as help participants get the things they need – such as furniture and kitchen supplies – and places to stay.
Denver has around 4,700 households experiencing homelessness
The program is divided into three different groups, with 260 receiving $6,500 up front and then getting $500 a month for 12 months; another 260 will receive $1,000 a month for 12 months; and the control group of 300 will get a $50-a-month stipend to complete surveys
Nelson said some of the participants will come from those already using the city’s shelter services, but they cannot have severe mental health or substance issues, according to Axios Denver.
‘The Denver Basic Income Project is an opportunity to explore how the philanthropic community and the private sector can augment public support for those living in poverty, particularly our unhoused neighbors, and extend that hand up to stability,’ Denver Mayor Michael B. Hancock said in a statement.
The point of the program is to study whether or not the income will provide people with housing stability and better mental health. The University of Denver’s Center for Housing and Homelessness Research will conduct the research.
However, the study’s results will not be known until 2024.
Donovan expects around 100 cities to join in on the program by the end of the year.
‘It’s a growing movement,’ Donovan told Axios Denver. ‘The reason that there is so much activity is it’s working.’
Denver follows Chicago and Los Angeles, which have already launched universal basic income programs.
Chicago is distributing $30million among 5,000 participants in $500 monthly installments. Los Angeles launched a program in August, giving a 1,000 participants $1,000 a month for three years.
Critics of of the programs worry the free money will lead to people taking advantage of the system and lazier workers.
Angie Nelson, deputy director of Housing Stability and Homelessness Resolution, said that some of the participants will derive from those already using the shelter system. Participants will also be largely women, transgender and gender non-confirming individuals
However, a study conducted by Vox, found otherwise.
Since 1982, Alaskan citizens have received between $1,000 to $2,000 a month from the Alaska Permanent Fund, which has wiped out extreme poverty, according to Vox.
When economists researched employee behavior with the stipends, they found ‘the dividend had no effect on employment.’
Other countries like Canada, Brazil, and Germany have also tried a basic income program throughout different time periods.