Championing Guaranteed Income for Unhoused People through the Denver Basic Income Project

Why this investment?

With more than 10,000 homeless residents, the Denver metro ranks 19th nationally in terms of overall population size, but 5th in terms of its unhoused population. Like elsewhere, people of color—especially Black and Native Hawaiian and Pacific Islander people—are disproportionately unhoused, as are people with disabilities. And in a city where temperatures dip below freezing on most winter nights, 30 percent of unhoused people are unsheltered, posing significant risks to their health and safety.

This high level of need, along with the success of guaranteed income pilots such as the Magnolia Mothers’ Trust, Stockton Economic Empowerment Demonstration, and Vancouver’s New Leaf Project, which focused on unhoused people, inspired Donovan to launch an effort to test how unconditional cash could provide immediate relief and be a part of a longer-term solution. In fall 2021, the first phase of the project enrolled 11 participants in a “soft launch” while continuing to build community and political support for the concept. That support came in 2022, when Denver’s then-Mayor Michael Hancock joined the Mayors for a Guaranteed Income (MGI) network, and the Denver Department of Housing Stability, along with project participants and community partners, successfully advocated for the City to dedicate $2 million in ARPA funding to support a 12-month pilot. 

DBIP showed promising results after the first year, and after extensive community advocacy and a City Council request for $4 million of additional support, Mayor Johnston allocated an additional $2 million in ARPA funding to DBIP in November 2023.

What is this investment?

DBIP provides unconditional direct cash payments to unhoused people and families with the goal of giving them financial tools and a cushion to cover their most basic needs. Structured as a mixed-methods, randomized controlled pilot, the project is supported by a variety of partners including the Colorado Coalition for the Homeless, MGI, and the City and County of Denver, with the University of Denver Center on Housing and Homelessness as the research partner. 

During the first year of the pilot, which began in November 2022, the pilot included 820 participants, all underhoused adults who reported having no severe, unaddressed mental health or substance needs and are receiving services through one of 19 homeless service providers in Denver. Eligible participants were randomly selected and divided into three groups: 1) 260 participants received $1,000 a month for 12 months; 2) 260 participants received $6,500 upon enrollment and $500 a month for the subsequent 11 months, allowing the researchers to examine the effects of a large lump sum payment; and 3) 300 participants served as an “active comparison” group receiving $50 a month for 12 months. In addition to the cash payments, all participants received cell phones with year-long data plans to allow them to participate in the research if they chose to do so. While not a requirement of the program, 92 percent of the participants agreed to participate in the research project, which included completing long-form surveys at enrollment at the 6 and 10-month points, and completing biweekly surveys via text.

The additional investment from the City and other private funders, including The Colorado Trust,  allowed DBIP to extend the pilot for an additional eight months and re-enroll 19 participants from the prior soft launches. For its second year, the program is making some changes to the structure, including eliminating the lump-sum payment group to maintain research continuity, increasing the active comparison group payments to $100, and focusing more on the long-form surveys which they found produced cleaner data. The project is increasing its focus on community-building events, responding to the interests expressed by participants and community partners.

The project is testing the impact of direct, unrestricted cash payments in comparison to the typical care and services provided to individuals and families who are unhoused in Denver. The research team is examining a wide variety of outcomes in addition to housing stability, including financial well-being, employment, physical and mental health, social supports, child well-being, and public service interactions and expenses.

Centering equity in the program

DBIP has embraced racial equity as a key value, which means ensuring that its participant pool reflects the demographics of unhoused people in Denver. Donovan explains, “In Denver, our black neighbors represent around 9.2 percent of the population, but over 20 percent of the unhoused population,” Donovan says. “So we committed one way or another to matching those demographics. And if it didn't happen organically, we were going to stratify the data and the randomization process.” 

Layered atop the project’s focus on matching the demographics of the full unhoused community, the City sought to address the tri-fold increase in the number of women in the shelter system during the pandemic, and its initial $2 million ARPA investment prioritized women, transgender and gender non-conforming persons, and families currently using the shelter system for enrollment in the program. 

Equitable access to the program began with the recruitment process: DBIP partnered with local homeless services providers that have an explicit focus on serving people of color and other marginalized groups, specifically Black, Indigenous, and LGBTQ+ people, to conduct outreach and recruitment. The intentional approach succeeded: 67 percent of the pilot participants identified as people of color, with 27 percent identifying as Black, 18 percent as Latinx/Hispanic, and 7 percent as Indigenous. About an even number of participants identify as male and female, and about 3 percent of participants are non-binary, transgender, or gender non-conforming. In addition, about half of participants have one or more disabilities.

A second aspect of the project’s equity approach is its respect for participants’ agency and long-term well-being, which manifests in the program and research design in several ways. Most significantly, the project made a strategic decision during the first pilot year to try to run the cohort longitudinally (Donovan suggests 3-5 years) both in recognition of the dire consequences of eliminating the assistance for such a vulnerable population and to test its hypothesis that a sustained income floor can have transformational impacts for people who are unhoused. The project also operationalizes equity principles through its research and programmatic approach, including compensating participants for time spent contributing to the research, adopting best practices such as a bill of rights for storytelling, providing free and at-cost replacement phones, and continually incorporating participant and partner feedback into project design.

One of the biggest challenges for DBIP to date relates to funding, specifically, a funding gap between the first and second year of the program as it was continuing to raise the necessary $8 million per year. This meant that participants experienced a lapse in payments of up to four months between November 2022 and February 2023 when the program extension launched. (The program had staggered launch dates over the initial four-month period to ensure an individualized enrollment process). While the project has raised an impressive $14 million to date, raising the necessary resources to avoid the payment disruptions will be an ongoing challenge unless there’s statutory implementation by the City or State.

Outcomes to date

In June 2024, DBIP researchers released their evaluation report. They found significant improvements in housing security across all three groups, with 43 to 48 percent of participants (depending on their payment group) having their own home at the end of the year, compared with  6 to 12 percent at enrollment. Across the board, the number of participants sleeping in shelters or outside decreased significantly, and the probability of being unhoused declined dramatically. Some participants were even able to afford renting an apartment for the first time.

With respect to financial stability, the participants receiving the full transfer reported higher rates of full-time employment, and all groups reported an increase in their ability to pay bills and expenses. Many participants were even able to reduce debt. All participants reported large improvements in their sense of financial well-being. 

The health impacts were mixed. Food insecurity and parenting distress decreased across all three groups, yet many participants experienced slight declines in physical health, energy, and sleep quality. General stress and anxiety levels slightly increased across all three groups, and feelings of hope and agency did not improve among the guaranteed income recipients and slightly decreased for participants in the active comparison group, according to quantitative tests. However, the qualitative study based on interviews with participants found that “Almost all research participants noted feelings of relief, decreased stress, and increased hopefulness when asked about the impact of the project on their daily lives.”

Participants reported more time for leisure, social, and religious activities. Those with caregiving responsibilities emphasized the positive impact that the leisure time and money had on their relationships. Those in the larger payment groups also experienced higher rates of transportation security.

Across all three groups, DBIP calculated that almost $600,000 was saved in public service costs, such as for hospital visits, shelter stays, jail time, and addiction treatment centers.

Throughout the DBIP research, which included interim reports as well as the full evaluation study, the active comparison group saw similar housing and financial security impacts as the groups receiving the full guaranteed income payments. These changes could partly be due to the transient or episodic nature of homelessness for most shelter users, and they could also indicate that the program’s non-monetary elements, such as community programs and social connections, are having a positive impact.

Toward transformational change

In addition to building the support and raising the resources to continue the original cohort for a long-term period, the DBIP wants to contribute to the movement for cash locally and support other communities in testing the concept of unconditional cash as a tool to address homelessness. Locally, Donovan sees many opportunities for Denver to provide cash support to vulnerable populations as a way to accelerate and enhance outcomes. 

In terms of scaling up the program, Donovan says that his goal is to provide $1.2 billion dollars to 100,000 people within the next five years. To support replication, the project is currently creating a playbook based on their learnings to help others stand up programs tailored to their particular needs and characteristics. With the new cohort underway, the Denver Basic Income Project is continuing to generate momentum for cash as an important component of a comprehensive solution to homelessness.

Acknowledgements

Support for this case study was provided in part by the Robert Wood Johnson Foundation’s Policies for Action program. The views expressed here do not necessarily reflect the views of the Foundation.