The University of British Columbia, with the input of the Federal Government and a number of private contributors, gave 50 homeless people $7,500 each to use as they please.

For obvious reasons, the project excluded people with severe substance, alcohol use or mental health symptoms. It required participants to have been homeless for less than two years.

It is clear that the current approaches are failing, so the idea was to try something about new o tackle the homelessness crisis.  

Researchers tracked the spending of the recipients for a year after they received the cash. They also followed a control group of 65 homeless people who did not get the handout. And, contrary to what most are led to believe about the homeless, they did not spend it booze, cigarettes and drugs, the researchers found, instead they spent it on rent, clothing and food. Furthermore, the windfall contradicted the basic expectation by generating an average saving of almost $800! Yes, the “shiftless” homeless actually saved money for a rainy day.

The study found recipients spent 99 fewer days homeless, and spent 55 more days in stable housing. They also retained $1,160 more savings.

“I think,” said Dr Jiaying Zhao, who is working with policymakers on the problem, “this study provides very strong evidence in favour of a basic-income policy.”

The findings, according to Zhao, found a range of surprising positive benefits of a cash transfer that cannot be denied.

Participants came from homeless shelters across the B.C. Lower Mainland.

The study said that by reducing time in shelters, the cash transfer was cost-effective because a shelter stay in Vancouver was about $93 per night, and the fewer nights in shelters resulted in “societal cost savings” of $8,277 per recipient. That represented a net saving of $777 compared to the cost of the handout. Furthermore, the freed-up shelter beds would help others avoid sleeping on the street.

The researchers also conducted an online survey of about 1,100 U.S. residents to understand public perceptions of homeless people’s spending because they wanted to hear the views of other voices and not Vancouverites, who tend be more progressive than the average North American.

Survey respondents predicted that recipients of an unconditional $7,500 cash transfer would spend 81 per cent more on goods like alcohol, drugs and tobacco if they were homeless than if they were housed. That did not happen.

“That’s an unfortunate, pervasive belief held by many people, so we wanted to actually examine or look at this bias,” she said.

Zhao said her team found public perception can be challenged through effective messaging and policy changes.

To that end, Zhao is working with politicians and policymakers to create a national framework for a guaranteed basic income to cover essential living expenses for people in Canada over age 17.