Denver Launches Basic Income Pilot to Support People Experiencing Homelessness
By Robert Davis
Denver will be among the first cities in the U.S. to experiment with providing people experiencing homelessness a guaranteed basic income.
Mayor Michael Hancock’s office will partner with The Denver Basic Income Project (DBIP) and the Mayors for a Guaranteed Basic Income to launch the initiative. The group said on Thursday that its goal as building “a healthier society grounded in social justice and centered around improving human thriving.”
“Homelessness, income inequality, a hollowed-out middle class, an alarming disparity in access to opportunity, and the challenges of mental health and poverty all stem from a lack of equity in our economic systems,” Hancock said in a statement.
PHOTO CREDIT: Giles Clasen
Not only is homelessness growing in Denver, but it is also becoming more visible. According to Denver’s latest Point in Time (PIT) Count numbers, the total number of people experiencing unsheltered homelessness nearly doubled between 2019 and 2020, before the pandemic began. Similarly, the total number of people experiencing homelessness has increased each year since 2017.
There has also been an alarming growth in the number of unaccompanied youths experiencing homelessness as housing in Denver becomes increasingly unaffordable. According to the Colorado Association of Realtors, COVID-19 pushed Denver’s affordability index to its lowest point in the last four years.
The organization measures affordability by comparing the medium wage as a percentage of what is necessary to buy a median-priced home. For example, Denver’s median wage was over 180% of what was necessary to buy a home in 2011, meaning housing was very affordable. Today, Denver’s affordability index sits at a paltry 78%.
As a result, McKinney-Vento data from the Colorado Department of Education shows that the number of youths experiencing homelessness has increased. A total of 1,849 students are experiencing homelessness in Denver, representing a 17% increase from 2016.
Meanwhile, PIT data only accounts for 196 unaccompanied youth, suggesting that most homeless youth are experiencing the “invisible” side of homelessness and are living doubled-up with friends or family.
These are some of the reasons the Bell Policy Center declared in January that economic mobility is out of reach for many Denverites. Another reason the think tank cited is that wages have stagnated while the cost of K-12 education, childcare, and healthcare have all skyrocketed.
To help combat these issues, Denver’s basic income pilot will begin with an initial $5.5 million war chest to issue direct payments to program participants.
DBIP Founder Mark Donovan described the program as “common sense,” saying that our society must do better for the less fortunate.
“Direct cash payments move toward eliminating wealth inequality and begin to build a healthier community here in Denver and hopefully we’ll create a model for other cities to follow,” he said in a statement.
Donovan added that he began the privately-funded initiative after seeing the success of the New Leaf Project (NLP) in Vancouver, Canada, and the Stockton Economic Empowerment Demonstration (SEED) project in California.
The SEED project gave 125 participants a monthly $500 installment with no strings attached. After two years, all of the participants had paid off outstanding debts, got full-time jobs, and reported lower rates of anxiety and depression, according to a report by 9News.
New Leaf gave 115 participants a one-time cash payment of $7,500. After one year, every participant had found stable housing, and some had been able to save as much as $1,000 over the entire year, according to a report by The Alternative.
Both programs saw a 39% reduction in spending on goods such as alcohol, drugs, or cigarettes.
The City of Los Angeles also recently announced it will begin a basic income pilot. The program will provide a monthly stipend of $1,000 to people experiencing homelessness, according to Mayor Eric Garcetti’s office.
Javier Alberto Soto, president, and CEO of The Denver Foundation, said the new basic income pilot is a “powerful example” of what happens when the government, private entities, and nonprofits put their heads together to solve a problem.
“Many people in our community need resources to overcome deep, systemic issues that lead them to homelessness in the first place. Basic incomes will create a lifeline for stability, economic opportunity, and wellness,” he said in a statement.