People who received $1,000 a month from the City of Austin for a year spent the bulk of the cash on housing, according to a new study.
Cities across the country, including Cambridge, Mass., and Ann Arbor, Mich., have begun piloting these guaranteed income programs, or universal basic income programs. Under the programs, low-income families generally receive a set amount of cash each month, sometimes via direct deposit to a bank account or on a swipe card. They can spend the money however they like.
Austin began its first guaranteed income program in 2022. The city selected 135 households to each receive the money for a year. Those who responded to a survey from the Urban Institute, a nonprofit research organization, said they spent 60% of the money on rent and mortgage payments. (Fifty-four of the 135 households that participated responded to the survey.) At the end of the one-year pilot, a larger portion of those who received the cash said they were less likely to be evicted or have their home foreclosed on.
That was true for Taniquewa Brewster. Brewster said most of the money she received from the city beginning in 2022 went to rent and helping friends, family and neighbors pay for food and housing. Last year, Brewster had to be hospitalized for a week and used some of the money to cover her hospital bills.
A mom of five who was not regularly employed when she began receiving the cash, Brewster also used the money to pay for night classes to become a leasing agent.
By the time the cash deposits ended in September, she had gotten a job as a property manager at an apartment complex. She now earns about $3,000 a month.
Brewster said before she got the job she began to worry as her year in the program was coming to an end.
“I was worried because I had become reliant on [the money],” she said. “[The prospect of] not having it was stressful.”
Other participants felt the same way, according to the Urban Institute study. While people who received the city cash were better able to cover their housing costs and felt more confident they would not lose their homes, they also reported a higher degree of worry at the end of the program year.
“It makes sense,” said Mary Bogle, a principal research associate at the Urban Institute. “People have this cushion for a year and then you're at the end of it and you're going to worry a lot because you've experienced a life that is less stressed out. Suddenly you're going to be stressed out again.”
Bogle said a year is sometimes not enough time to accomplish what Brewster did — taking classes and getting a job or a better-paying job.
The city’s pilot ended in August. A month later, the City Council approved another $1.3 million to continue the guaranteed income program. But state lawmakers could put a stop to programs like it.
Earlier this month, state Sen. Paul Bettencourt, a Republican from Houston, asked Attorney General Ken Paxton to weigh in on the legality of guaranteed income programs. In his letter, Bettencourt cited programs in Harris County and Austin, and questioned whether guaranteed basic incomes can be run by a county government and whether they violate a provision in the state constitution.
“Quite frankly, a no-strings attached universal basic income program … is more of a lottery by socialism than it is by public policy,” Bettencourt told KUT, referring specifically to the program in Harris County.
Opinions issued by the attorney general are not binding, but can be cited in legal proceedings.
