Feb 1, 2024 - News

How families spent an extra $1,000 a month

Illustration of a repeating pattern of houses made out of hundred dollar bills.

Illustration: Aïda Amer/Axios

The city of Austin gave 135 low-income households $1,000 every month for a year as part of a pilot program and discovered that most of the additional income was spent on meeting the city's high housing costs.

Why it matters: In a city that's grappled with housing affordability and gentrification, the findings offer local officials possible solutions for housing-insecure residents.

Driving the news: The results of the Austin Guaranteed Income Pilot published this month by Washington, D.C.-based Urban Institute reveal how direct cash might help low-income families deal with unstable housing circumstances.

  • The city funded 85 households while St. David's Foundation covered the additional 50 recipients. Cash transfers ended in August.

Catch up quick: The city's Equity Office began the UpTogether pilot in 2022, giving unrestricted cash allotments to individuals and families dealing with housing instability in high-poverty ZIP codes.

  • 40% of the recipients had a household income of less than $10,000, and 51.8% below $15,000, according to a memo by the Equity Office at the beginning of the pilot.

Zoom in: The Urban Institute found that roughly 60% of the money went toward housing, 20% went to basic needs and 10% to other bills, and the remainder was invested or given to others.

  • Direct cash improved participants' housing stability, mental health and food security, the report found.
  • Employment remained relatively stable through the pilot, with 9% reporting reduced working hours. Those who reduced work said they used the time to "skill up" for future work or took on caretaking responsibilities, according to the report.
  • "It helped me get back on my feet," an anonymous senior who is parenting her grandson told the Urban Institute. "If I didn't have that, I wouldn't be able to pay my rent."

Yes, but: "A substantial number of participants told the research team that they were deeply concerned about being able to make ends meet once the pilot ended," the report said.

  • "Even some of those who were leveraging the cash to build skills or make new job contacts expressed doubt that they could fill a $12,000 gap in annual gross income with increased labor market income in such a short period of time."

What they're saying: "The hard part is sustaining the progress," Ivanna Neri, UpTogether's senior director of partnerships, told Axios. "We need governments to divert funding from programs that don't work and directly invest those dollars into people."

  • City Council members in August approved a second round of family stabilization grants of $1,000 a month for at least 85 families for 2024-2025. Details are still being finalized to determine eligibility and when they will be available.

What's next: Urban Institute researchers will continue to survey the participants on how they handle the end of guaranteed income, with their final findings expected later this year.

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