Denver is set to give 140 homeless people $12,000 in cash with no strings attached to help lift them out of poverty, despite soaring crime rates in Mile-High City.
The city has allocated $2 million from the American Rescue Plan Act to fund a program run by the Denver Basic Income Project.
The total program will cost about $9 million, is looking to help about 820 people, but the $2 million provided by the city will fund about 140 people.
The rest of the money will be donated through charities, including the Colorado Health Foundation and the Denver Foundation, Denver Basic Income Project founder Mark Donovan told Axios Denver.
Approximately 4,700 households are experiencing homelessness in Denver as of January 2022.
Participants – who will mostly be women, transgender and non-binary – will be randomly selected after submitting their applications and will most likely start receiving payments starting in November, according to ABC 7. Denver.
Denver Basic Income Project founder Mark Donovan (pictured) and his team will be providing money to 820 homeless people. 520 of them will receive $12,000 each over the course of a year as part of research to see if the basic income system helps housing and mental health
Angie Nelson, deputy director of Addressing Housing Stabilization and Homelessness, told ABC 7.
The program is split into three different groups, with 260 people receiving $6,500 upfront and then receiving $500 a month for 12 months; Another 260 will get $1,000 a month for 12 months; and a control group of 300 people will receive a $50 a month stipend to complete the surveys.
All participants will also receive a free cell phone and one year of service.
Additionally, the Colorado Homeless Coalition will track how people spend their money, as well as help participants get the things they need – such as furniture and kitchen supplies – and a place to stay.
Denver has approximately 4,700 households experiencing homelessness
The program is split into three different groups, with 260 people receiving $6,500 upfront and then receiving $500 a month for 12 months; Another 260 will get $1,000 a month for 12 months; and a control group of 300 people will receive a stipend of $50 a month for completing the surveys
Some of the participants will come from people who have used the city’s shelter services, Nelson said, but they may not have serious mental health or substance problems, according to Axios Denver.
‘The Denver Basic Income Project is an opportunity to explore how the philanthropic community and the private sector can increase public support for those living in poverty, especially our needy neighbors. us, and extend that embrace to stability,” Denver Mayor Michael B. Hancock said in a statement.
The purpose of the program is to study whether income provides people with housing stability and better mental health. The University of Denver’s Center for Housing and Homelessness Research will conduct the study.
However, the results of the study will not be known until 2024.
Donovan expects about 100 cities to join the program by the end of the year.
“It’s a growing movement,” Donovan told Axios Denver. ‘The reason that there’s so much activity is that it’s working.’
Denver follows Chicago and Los Angeles, which have introduced universal basic income programs.
Chicago is distributing $30 million to 5,000 participants in monthly installments of $500. Los Angeles kicked off a program in August that gives 1,000 participants $1,000 a month for three years.
Critics of the program worry that the free money will make workers more lazy.
Angie Nelson, deputy director of housing stabilization and homelessness, says some of the participants will come from people already using the shelter system. Participants will also be predominantly women, transgender and non-binary individuals
However, a study conducted by Vox, suggests otherwise.
Since 1982, Alaskan citizens have received between $1,000 and $2,000 a month from the Alaska Permanent Fund, which has eradicated extreme poverty, according to Vox.
When economists study employee behavior with wages, they find that ‘dividends have no effect on employment.’
Other countries such as Canada, Brazil and Germany have also tried a basic income program for different periods of time.