The best of intentions aren’t enough to turn a bad policy into a good one.
In Austin, the City Council is moving forward with a plan to give 85 families roughly $1,000 a month for a year to use in any way they want, a $1 million, taxpayer-funded experiment in providing a guaranteed income to people who are on the verge of losing their homes.
We’ve seen this approach before and don’t question that cash can help a person in crisis. During the heights of the pandemic, millions of Americans benefited from eviction moratoriums and federal stimulus checks. Some families paid down debt and saved some money. But as moratoriums and emergency checks end, and as housing costs soar and inflation shreds paychecks, eviction filings and financial stress are rising again.
But Austin’s policy is the wrong one to address those concerns. Austin has a housing affordability crisis, a homelessness crisis and a long list of community challenges that $1 million in the hands of a nonprofit or social services agency might actually make a lasting difference. Instead, Austin is authorizing payments to a handful of low-income residents. The sentiment is admirable; the economics aren’t.
The approach will barely make a dent in the housing crisis or reduce the ranks of the more than 3,100 people identified as homeless in Austin. Most troubling is that the plan has no real strategy behind it. The program has no requirement that recipients actually use the money for housing costs although it is expected that recipients will pay household costs like rent, utilities, transportation, child care and groceries. Worse, it could impact income eligibility rules for other assistance programs.
Austin will pay $152,000 to a California nonprofit to manage this initiative, which stemmed from a recommendation of a public safety task force that examined city policies in response to protests over police brutality in 2020. Roughly, 28 U.S. cities are experimenting with some form of guaranteed income.
Los Angeles County will send $1,000 a month to 1,000 residents for three years through a new guaranteed income program pilot called “Breathe.” Chicago’s $31.5 million program, funded from pandemic relief dollars, promises to give out $500 monthly cash payments to 5,000 low-income households for a year with no strings attached. In Texas, San Antonio and El Paso County used a mix of federal stimulus dollars and charitable contributions as an emergency safety net for struggling residents during the pandemic.
Local taxpayers cannot sustain such programs. Nor is there evidence that such programs will stimulate self-sustaining households.
City policy should focus on creating economic advancement opportunities, like ensuring they invest in workforce training and building diverse economies, instead of chasing a guaranteed income program that can’t provide long-term solutions to poverty
Instead, they are diverting taxpayer dollars from other basic city needs, making it more difficult to invest in their own cities and even creating a dependence on local government that cannot be sustained.
